China's factory activity stagnated in May as export orders fell and costs rose, raising concerns about economic momentum despite strong services.
China's factory activity stalled in May as new export orders contracted and input costs rose, raising concerns that the economy is losing momentum despite strength in services and high-tech manufacturing, reported Reuters.
The official manufacturing purchasing managers' index fell to 50 from 50.3 in April, according to the National Bureau of Statistics. This reading, which marks the line between growth and contraction, was the lowest in three months.
The data followed earlier figures showing that growth momentum cooled in April despite a rebound in exports. Supply improved, but demand weakened, with production and new orders sub-indexes at 51.2 and 49.9 respectively.
New export orders dropped more sharply, falling to 48.6 from 50.3 in April. This decline has added pressure on policymakers to reduce reliance on overseas demand and strengthen domestic consumption.
