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China PMI May 2024

China: Manufacturing and non-manufacturing PMIs fall in May

The National Bureau of Statistics’ Manufacturing Purchasing Managers’ Index (PMI) fell from 50.4 in April to 49.5 in May, undershooting market expectations. Consequently, the index moved below the 50.0 no-change threshold, signaling a worsening in manufacturing sector operating conditions from the previous month. The headline print chiefly reflected worse readings for new orders and output

The National Bureau of Statistics’ non-Manufacturing PMI fell from 51.2 in April to 51.1 in May, also below market expectations. This was the result of weaker momentum in the construction sector, as the services PMI ticked up. Construction activity was likely weighed on by slower than usual government bond issuance and a weak property sector.

Giving their take on the latest data, Nomura analysts said:

“Overall, this latest PMI survey shows that the ongoing recovery remains fragile, and exports alone may not be enough to engineer a strong recovery without a stabilisation of the property sector. We continue to believe that Beijing is moving in the right direction with regard to ending the property crisis, but patience is warranted at this stage, and it takes time for Beijing to become fully prepared and announce more forceful and comprehensive measures.”

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