Chinese Manufacturing Shrinks for the 6th Month in a Row

Author: Adi Gaskell
Published: May 02, 2012 at 5:36 am
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chinese manufacturingBack in March a World Bank released a report called China 2030, which suggested that the Chinese economy could be in line for a severe slow down in growth in the coming years.

So news this week of a shrink in Chinese manufacturing should be cause for concern for Chinese authorities.

The finding comes out of the monthly survey of purchasing managers conducted by HSBC.  The survey revealed that Chinese manufacturing contracted in April for the sixth month in succession.

The survey relies on a purchasing managers index.  If the manufacturing sector is growing it returns a score over 50.  In April the score was just 49.3, with the last 50+ figure being seen in October 2011.

A report by the state-backed China Federation of Logistics and Purchasing on Tuesday was more optimistic. The federation said its PMI rose 0.2 points to 53.3 in April, up from March's 53.1 and February's 51.0, in the fifth straight month of expansion.

The federation's survey tends to reflect the status of big, state-owned manufacturers, while the HSBC survey is focused more on private and export-sector activity.

The federation said its PMI for "small enterprises" fell below 50 last month, in line with the HSBC's reading.

Last year, Process Excellence Network reported that many companies are shifting work back to the developed world, due to concerns about the quality of product they're receiving.

"We are beginning to see orders return to our shores, from international companies worried about the technical expertise of manufacturing businesses in Asia.", Simon Griffiths said in an interview.

 
 

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Article Author: Adi Gaskell

A writer on management issues for publications such as Professional Manager, CMI, HRM Today, Business Works and Technorati. I also cover social media for Social Media Today, DZone and Social Business News.

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