China’s manufacturing PMI dropped to 49.4 in May from 50.1 in April,
falling below the critical 50-mark. The latest reading indicates that the
manufacturing sector has contracted recently amid the weakening
domestic and export demand.
9 of the 13 sub-indices were lower than their respective levels in the
previous month. For example, the new orders index dipped into the
contractionary zone in May. Meanwhile, the new export orders index fell
sharply by 2.7 pts from the previous month to 46.5 in May, indicating that
new export orders have dropped at a faster pace recently. Against this
backdrop, the growth of production activities has slowed: the output index
went down by 0.4 pts from the previous month to 51.7 in May. In response
to the sluggish demand, Chinese manufacturers have slashed the prices
of their products lately: the ex-factory prices index dropped to 49.0 in
May, down by 3.0 pts from the previous month.
By size of enterprises, the PMI of ‘large enterprises’ came in at 50.3 in
May, down from 50.8 in April. The PMI of ‘medium enterprises’ fell to 48.8
in May from 49.1 in April. The PMI of ‘small enterprises’ went down to
47.8 in May from 49.8 in April.
The output index was 51.7 in May, down from 52.1 in April. The output
index of ‘large enterprises’ rose slightly to 53.1 in May from 53.0 in April;
the output index of ‘medium enterprises’ came in at 51.1 in May, the same
as in April. Meanwhile, the output index of ‘small enterprises’ went down
to 48.6 in May from 51.2 in April.