China’s Factory Activities Suffer in May as Orders Drop

China’s Factory Activities Suffer in May as Orders Drop

In May, China's factory activities did not get any better with months of successive drops. On Wednesday a private survey revealed that new orders softened, leading to loss of hope for any recovery soon in the huge manufacturing sector of the country.

In May, the Caixin/Markit Manufacturing Purchasing Manager' index (PMI) dropped to 49.2 which was lower than the reading of 49.4 in April and the market expectations of 49.3.

The second-largest economy in the world is still struggling to get a grip on its manufacturing activities.

On the other hand, the official Purchasing Managers' Index (PMI) in May remained same as April's 50.1 which were just above the 50 mark which separates expansion from contraction on a month over month basis.

In March and April there were some improvements noted in the factory activities in China which had sparked hopes of an improving economy but the modest decline in May reversed the optimism. In May, the new export order index dropped to 47.7 compared to April's 48.6.

Chinese manufacturers have noted a drop in orders from abroad as well as at home. In recent months the manufacturers have trimmed payrolls and cut down on raw material purchases.