China’s factory activity contracts for second month in row as US trade tensions persist
Official PMI remains below 50, with ‘persistently high uncertainty’ in global trade tipped to weigh on growth outlook in both US and China
The official purchasing managers’ index (PMI) improved slightly to 49.5 in May from 49.0 in April but stayed below the benchmark of 50 separating growth from contraction, in line with a median forecast of 49.5 in a Reuters poll.
“Recent developments between China and the United States suggest bilateral relations are not improving,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
“Firms in China and the United States with exposure to international trade have to run their business under persistently high uncertainty. It will weigh on the growth outlook in both countries.”
The new orders sub-index rose to 49.8 in May from 49.2 in April, while the new export orders sub-index rose to 47.5 from 44.7.
Some firms reported a noticeable rebound in trade with the United States, with improvements in both imports and exports, according to Zhao Qinghe, senior statistician at the National Bureau of Statistics.