Economy

China's April PMI of manufacturing sector drops

(Xinhua)
Updated: 2011-05-01 15:29

BEIJING - The Purchasing Managers Index (PMI) of China's manufacturing sector dropped to 52.9 percent in April from the previous month, the China Federation of Logistics and Purchasing (CFLP) said Sunday.

The PMI figure was 53.4 percent in March, 52.2 percent in February and 52.9 percent in January.

Related readings:  China's March CPI up 5.4%  PMI on the rise in March despite cost pressures  China's PMI drops to 6-month low in February

A reading above 50 percent indicates economic expansion. One below 50 percent indicates contraction. China's PMI has been staying above the boom-or-bust line for 26 months in a row.

The CFLP said in a statement that the drop indicates that China's economy is moving along the direction set by its macro control policies.

Analysts said the drop is in line with the slowing domestic demand growth and may add to possibilities of an economic growth slowdown.

The country's consumer price index (CPI), a main gauge of inflation, rose to a 32-month high of 5.4 percent in March from a year ago, with imported inflation strongly contributing to the domestic price hike.

To mop up the excessive liquidity that can stimulate inflation, the country's central bank has raised the reserve requirement ratio for commercial banks nine times since the beginning of last year.

On April 5, the central bank announced the second interest rate hike this year. It was also the fourth increase since the start of 2010.