China's official gauge of manufacturing activity has recorded a deeper contraction in May, suggesting a continued slowdown in the country's post-pandemic recovery. The National Bureau of Statistics revealed that the official manufacturing Purchasing Managers' Index (PMI) dropped to 48.8 in May, down from 49.2 in April.
The decline was also below the expectations of economists surveyed by The Wall Street Journal, who had predicted a reading of 49.7. This is also the second consecutive month where the PMI fell below the critical 50-mark, which separates expansion from contraction in activity levels.
Several key indicators within the manufacturing sector contributed to this downward trend. The production subindex, for instance, fell to 49.6 in May from 50.2 in April, reflecting a decline in production levels. Similarly, total new orders dropped to 48.3 in May from 48.8, while new export orders experienced a slide to 47.2 from 47.6.
Notably, China's non-manufacturing PMI, which encompasses both service and construction activities, also witnessed a decline. According to the statistics bureau, the non-manufacturing PMI decreased to 54.5 in May from 56.4 in April.
Within the non-manufacturing sector, the sub-index tracking service activity witnessed a decline to 53.8 in May, down from 55.1 in April. Additionally, the construction sub-index fell to 58.2 from 63.9, indicating a slowdown in construction-related activities. The latest figures raise concerns about the overall health of China's economy and the sustainability of its recovery from the pandemic. As manufacturing and non-manufacturing activities show signs of cooling, it becomes crucial for policymakers and businesses to assess the situation and take appropriate measures to stimulate growth.
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