China's Manufacturing Index Drops in Negative Territory, May, 2019

China's manufacturing activity contracted in May, 2019 as manufacturing purchasing managers index (PMI) declined to 49.4, a decrease of 0.7 points from last month amid ongoing trade war between U.S and China. Among the five sub-indices composing PMI, two indices, production and supplier delivery time, registered above 50 thresholds, while three indices, New orders, Main raw materials inventory and Employed person, experienced contraction of 1.6, 0.2 and 0.2 points on MoM respectively in May, 2019.

• Index of Production and Supplier delivery time have registered at 51.7 and 59.0 receptively. 
• Index of New orders, Main raw materials inventory and Employed person have registered at 49.8, 47.4 and 47 respectively.

The drop in the index has largely been due to contraction in new orders and employment. This contraction suggests that there has been slowdown in sales and hiring.