Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

China Factory Activity Falls in May, but Less Sharply

Economic Indicators Jun 01, 2022 15:22
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Gina Lee

Investing.com –

China’s factory activity shrank in May, but the pace is slower as COVID-19 curbs eased, improving from a 26-month low in April.

The Caixin manufacturing purchasing managers’ index (PMI) was 48.1 in May, which is better than 48 in the forecast prepared by Investing.com and 46 recorded in April 2022. The data is still below the 50-point index mark which separates growth from contraction.

The data is in line with the official manufacturing PMI released on Tuesday which rose to 49.6 from 47.4 in April. Contraction in May was the second-sharpest slump since February, indicating a fragile recovery.

COVID-19-related restrictions such as lockdowns and mass testing in China caused economic damage to businesses. The sub-index for new orders fell for the third consecutive month in May but the pace was slower.

With the easing of lockdowns and the phased reopening of business activities in Shanghai, most sub-indexes under the Caixin PMI fell less sharply.

However, “unlike most other gauges, the employment measure fell further into negative territory in May,” Caixin Insight Group senior economist Wang Zhe said in a statement accompanying the data release as employers were reluctant to hire more staff.

“The negative effects from the latest wave of domestic outbreaks may surpass those of 2020. It's necessary for policymakers to pay attention to employment and logistics,” Wang added.

Even if Beijing striving to support the economy, analysts say the COVID-19 control measures threaten China’s growth target of “around 5.5%” for the year.

“While its recovery from the first wave of COVID in early 2020 was aided by a surge in construction activity, property developers are now struggling to finance existing projects. They won't launch new ones until there has been a marked pick-up in sales,” Capital Economics group chief economist Neil Shearing said in a note.

China Factory Activity Falls in May, but Less Sharply
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email