June 4 (Bloomberg) -- China's non-manufacturing industries expanded at the slowest pace in more than a year, as export orders declined and weakness in real estate countered strength in retailing and leasing, 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 statements yesterday in Beijing. That's the lowest reading since March 2011 when the federation started seasonally adjusting the data.
The report adds to evidence of slower growth in the world's second-biggest economy as Europe's debt crisis crimps overseas demand and government curbs on real estate feed through to more industries. A Chinese manufacturing index had the weakest reading in five months in May, federation data last week showed, helping push Brent crude below $100 a barrel for the first time in almost eight months.
Yesterday's index "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 a statement. "Market demand remains steady and reflects the structural changes in our country's economy."
Service industries now account for 43 percent of the economy, the federation said in yesterday's statement. That compares with almost 90 percent in the U.S. Under China's current five-year plan, the government aims to raise the share of services in gross domestic product to 47 percent by 2015, according to a Xinhua news agency report on May 28.
Government Support
U.S. and European stocks fell for the fourth week in five as weaker-than-estimated manufacturing output in the U.S. and China plus record unemployment in the euro area heightened concerns the global economy is slowing.
The benchmark Shanghai Composite Index rose for the first time in four weeks on speculation the government will take steps to boost the economy after a manufacturing PMI compiled by the statistics bureau and logistics federation expanded at the slowest pace since December.
The 50.4 reading for May was barely above the 50 mark that divides expansion from contraction and compared with a 52.0 median estimate in a Bloomberg News survey of 27 economists. 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.
Weak Momentum
The manufacturing surveys present "clear signs of weak economic growth momentum," China International Capital Corp. analysts led by Beijing-based Peng Wensheng said in a June 1 note. "The National Development and Reform Commission has recently expedited project approvals but whether this can effectively stabilize investment and GDP growth still depends on monetary and credit policies."
The economists forecast two to three more cuts in banks' reserve requirements this year and estimate a reduction in benchmark lending rates is likely "in the near term."
Premier Wen Jiabao and the State Council, or Cabinet, warned last month that the economy faces increasing downward pressure. They pledged to put a greater focus on growth and "actively" raise domestic demand.
The government announced new subsidies to boost sales of energy-saving household appliances including refrigerators and washing machines after the expiry of a previous program last year. Gome Electrical Appliances Holding Ltd., China's second- biggest electronics retailer, said May 25 its first-quarter net income slumped 88 percent from a year earlier as the end of the incentives led to a drop in consumer demand.
Growth Slowdown
No comments:
Post a Comment