The purchasing managers index (PMI), a barometer of manufacturing activities, stood at 52 percent in May 2011, falling from 52.9 percent in April, said the China Federation of Logistics and Purchasing (CFLP).
It was the second consecutive month of decline for the index, which also hit a nine-month low. But it still marked the 27th straight month in which the index was above the boom-and-bust line of 50 percent. A reading above 50 percent indicates economic expansion.
It shows that the broader economy is cooling down but remains on a stable track, said the CFLP.
The new orders sub-index, an effective gauge of domestic demand, stood at 52.1 percent in May, down from 53.8 percent in April. The input prices sub-index, a measure of how much factories pay for raw materials and other intermediary goods, slowed to 60.3 percent, compared with 66.2 percent in April.
"Signs are emerging that the Chinese economy is more likely than not to slow down," said Zhang Liqun, a researcher with the Development Research Center of the State Council. "Meanwhile, inflationary pressures seem to be abating as input prices head south."
Peng Wensheng, chief economist with the China International Capital Corp. Ltd., expected the PMI to continue decreasing because of power rationing in some regions. "But that will not prevent policymakers from releasing more tightening measure," he said. |