China’s manufacturing activity contracted for the first time in 11 months, an industry survey sponsored by Caixin showed Thursday, highlighting a growth downturn in the world’s second-largest economy.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI) — closely watched by investors as one of the first available indicators every month of the strength of the Chinese economy — came in at 49.6 in May, down from 50.3 in April.
A reading above 50 indicates expansion, while a number below 50 points to contraction.
It marked the first contraction since June 2016, when the manufacturing PMI was at 48.6, according to data from the survey, which is compiled by information and data analytics provider IHS Markit. May was also the third straight month that the figure has declined.
The survey, based on figures collected from more than 500 manufacturing companies across the country, adds to signs that the Chinese economy is losing steam as effects of government policies to cool an overheated property market and rein in financial riskskick in.
“China’s manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory,” said Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group, a subsidiary of Caixin Insight Group, in a statement releasing the figures.
The official PMI for the manufacturing sector, published by the National Bureau of Statistics (NBS) on Wednesday, was 51.2 in May, flat with the reading in April, which was the lowest six months.