China’s Factory Activity Slows to 50 in May as Weak Demand Weighs on Growth

China’s factory activity slowed in May, underscoring signs that the world’s second-largest economy is losing momentum as weak demand and broader external pressures weigh on manufacturers. An official survey released over the weekend showed the manufacturing purchasing managers’ index eased to 50 from 50.3 in April, putting factory activity at the threshold between expansion and contraction, according to the Associated Press.

The report also showed weakening underlying conditions in several parts of the manufacturing sector. New orders slipped to 49.9 from 50.6, production edged down to 51.2 from 51.5, and raw material stockpiles fell to 48.6 from 49.3, the AP reported. Those readings suggest that even though output is still marginally expanding, demand is softening and companies are being more cautious about inventory.