China factory indicator falls in May, suggesting growth has faltered

By ELAINE KURTENBACH
AP Business Writer

An official survey shows that factory activity in China slowed more than expected in May, suggesting further pressure on an economy already burdened by a prolonged crisis in the property industry. The official manufacturing purchasing managers index fell to 49.5 from 50.4 in April on a scale up to 100 where 50 marks the break between expansion and contraction. The main reason for the slowdown was a drop in output. Weaker new orders and export orders suggests slack demand. Analysts’ forecasts had put the manufacturing PMI at just above 50, or still in expansionary territory after the economy grew at a quicker than forecast annual pace of 5.3% in the first quarter of the year.