China's manufacturing activity contracted in May for the first time in eight months, with the headline seasonally adjusted Purchasing Managers' Index (PMI) falling to 48.3 from 50.4 in April, according to data released on Tuesday. The index, compiled to offer a snapshot of the country's manufacturing operating conditions, dipped below the neutral 50.0 threshold, indicating a deterioration in sector performance midway through the second quarter. Purchasing activity also dipped marginally, though a renewed – albeit modest – rise in stocks of purchases suggested that firms held adequate pre-production inventory, the announcement showed. Meanwhile, output fell at the steepest pace in two-and-a-half years, and stocks of finished goods rose slightly for the first time in four months due to both soft sales and delays in outbound shipments. Despite the downturn, business confidence improved. Firms grew more optimistic in May, citing expectations of better trade conditions and an expansion of export markets to help drive sales over the coming year. Attribution: Amwal Al Ghad English Subediting: Y.Yasser Download
