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Reuters

China’s factory activity shrank less sharply in May as coronavirus curbs eased and some production resumed, a private sector survey showed on Wednesday, improving from a 26-month low in April.
The Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 the previous month and was slightly above a Reuters poll of 48.
May’s contraction was the second-sharpest slump since February 2020, suggesting the recovery remains fragile.
The 50-point index mark separates growth from contraction on a monthly basis.




Surveyed firms tied the output drop to the impact of lingering pandemic-related restrictions on operations and subdued customer demand.
A subindex for new orders fell for the third consecutive month in May but at a slower pace. The gauge for new export orders also shrank less but remained in contraction for the 10th straight month.
Some firms blamed the weakness in orders to the pandemic, increased difficulties in shipping items as well as the Russia-Ukraine war.
The private survey, focusing more on small firms and coastal regions, was in line with Tuesday’s official manufacturing PMI which rose to 49.6 from 47.4 in April.
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 Zhe
Given the easing of lockdowns in some regions where virus cases dropped and the phased reopening of business activities in Shanghai, most subindices under the Caixin PMI fell less sharply.
However, “unlike most other gauges, the employment measure fell further into negative territory in May,” said Wang Zhe, senior economist at Caixin Insight Group, 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 said.
The average suppliers’ delivery times continued to lengthen sharply in May though logistics disruptions were not as widespread as in April.
Taken together with the official survey, they suggest that a recovery in industrial output is underway. But we think it is likely to remain weak amid softening foreign demand
Sheana Yue
Business confidence slipped to a five-month low amid concerns over the protracted virus restrictions and the war in Ukraine.
“The Caixin manufacturing index rebounded last month thanks to the easing of virus containment measures. Taken together with the official survey, they suggest that a recovery in industrial output is underway. But we think it is likely to remain weak amid softening foreign demand,” Sheana Yue, China economist at Capital Economics.
“The surveys suggest that a recovery in factory output has started in May. And with an improving virus situation nationwide, we expect a further acceleration in the coming months.
“That said, we doubt the rebound will be strong. Even without further largescale lockdowns, external headwinds will exacerbate the shift in foreign demand away from Chinese goods.”
‘Big shock to production’: China’s industrial profits slump as virus curbs hit
Even if policymakers strive to shore up the faltering economy, analysts say the control measures threaten Beijing’s “around 5.5 per cent” growth target 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 pickup in sales,” Neil Shearing, group chief economist at Capital Economics, said on Tuesday.
Two years ago, the economy was underpinned by soaring global demand for consumer goods, but this is fading too as global spending on services rebounds, he said.
The Caixin PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in China.


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China factory activity falls at slower pace, but Beijing needs to ‘pay attention’ to employment, logistics

Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 in April. Photo: Xinhua

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Shanghai reopening will aid China’s economy, but coronavirus still hanging over services, manufacturing

China’s official manufacturing purchasing managers’ index (PMI) rose to 49.6 in May, XX from 47.4 in April. Photo: Xinhua

China’s official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, rose to 47.8 from 41.9 in April. Photo: AFP

China foreign business sentiment reaches ‘tipping point’ as zero-Covid dents confidence, erodes attraction

The British Chamber of Commerce in China called for “predicable and proportionate” measures to be applied under China’s zero-Covid policy to mitigate disruption to mobility and manufacturing activities. Photo: AFP

The British Chamber of Commerce in China called for “predicable and proportionate” measures to be applied under China’s zero-Covid policy to mitigate disruption to mobility and manufacturing activities. Photo: Reuters

China’s zero-Covid policy has some manufacturers asking, ‘Should we stay or should we go?’

Supply chain decentralisation – and even offshoring production – has become more important for manufacturers amid China’s zero-Covid policy. Photo: AFP

Supply chain decentralisation – and even offshoring production – has become more important for manufacturers amid China’s zero-Covid policy. Photo: Xinhua

About 373 million people in 45 Chinese cities, including  Shanghai (above), have been under some form of lockdown since April. Photo: Reuters

China jobs: focus on technical colleges as answer to labour shortages in manufacturing

China is trying to encourage more young people to take up vocational careers to meet the country’s manufacturing needs. Photo: Xinhua


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Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 in April
On Tuesday, China’s official manufacturing PMI rose to 49.6 in May, up from 47.4 in April



Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 in April, data released on Wednesday showed.


China economy

China's economic recovery

China factory activity falls at slower pace, but Beijing needs to ‘pay attention’ to employment, logistics

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 in April On Tuesday, China’s official manufacturing PMI rose to 49.6 in May, up from 47.4 in April

Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 48.1 in May from 46 in April

On Tuesday, China’s official manufacturing PMI rose to 49.6 in May, up from 47.4 in April