China’s factory activity deteriorated for the first time in seven months in May as both domestic and external demand softened, a private survey showed, adding to concerns that the world’s second-largest economy is losing momentum.
The HSBC Purchasing Managers’ Index (PMI) for May slipped to 49.2, the lowest level since October 2012 and down from 50.4 in April.
“The downward revision of the final HSBC China Manufacturing PMI suggests a marginal weakening of manufacturing activities towards the end of May, thanks to deteriorating domestic demand conditions,” said Qu Hongbin, chief China economist at HSBC.
The reading adds to evidence in recent weeks that China’s economy is losing growth momentum, although the Chinese government’s official PMI, released on Saturday by the National Bureau of Statistics of China, ticked up to 50.8 in May from April’s 50.6.
The official survey focuses on bigger and state-owned firms, while the HSBC PMI covers more smaller and private-sector manufacturers.