China’s Non-Manufacturing Industries Grow at Slower Pace

By Bloomberg News - Jun 3, 2012 8:49 AM GMT+0700

China’s non-manufacturing industries grew at a slower pace for a second month, as export demand moderated and new orders in construction and real estate contracted, an official survey indicated.

The purchasing managers’ index fell to 55.2 in May from 56.1 in April, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing. A reading above 50 indicates expansion.

Today’s data adds to evidence that growth in the world’s second-biggest economy is slowing after a government manufacturing report showed the weakest reading since December. Brent crude tumbled below $100 a barrel on June 1 for the first time in almost eight months on concern that China’s industrial expansion is moderating and unemployment in the U.S. is rising.

“Although the index fell slightly in May, it was still at a relatively high level of 55.2 which is in line with the general trend of steady growth in non-manufacturing industries,” Cai Jin, a federation vice chairman, said in the statement. “Market demand remains steady and reflects the structural changes in our country’s economy.”

A manufacturing PMI compiled by the statistics bureau and logistics federation fell to 50.4 in May from 53.3 in April, a June 1 report showed. The reading, barely above the 50 mark that divides expansion from contraction, was the lowest in five months and compares with a 52.0 median estimate in a Bloomberg News survey of 27 economists.

Manufacturing Contracted

A separate gauge from HSBC Holdings Plc and Markit Economics released the same day showed a seventh straight contraction, the longest since the global financial crisis.

The federation’s non-manufacturing PMI is based on a survey of about 1,200 companies covering 27 service industries including construction, telecommunications and leasing. Non- manufacturing industries account for about 40 percent of the economy, according to the agency.

The federation started publishing a seasonally adjusted index from its March survey, and revised readings back to March 2011. A separate gauge for services industries will be released by HSBC and Markit on June 5.

--Zhou Xin, Liza Lin. Editors: Nerys Avery, Jim McDonald.

To contact the reporter on this story: Bloomberg News in Beijing at xzhou68@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net