City skyline in China

China PMI May 2023

China: Manufacturing and non-manufacturing PMIs deteriorate in May

The National Bureau of Statistics’ Manufacturing Purchasing Managers’ Index (PMI) fell to 48.8 in May from April’s 49.2. May’s result marked the worst reading since December 2022, and undershot market expectations. As such, the index fell further below the 50.0 no-change threshold, signaling a sharper deterioration in manufacturing sector operating conditions compared to the previous month.

The headline print reflected faster falls in new orders and employment, and worsening output. Meanwhile, the National Bureau of Statistics’ non-Manufacturing PMI came in at 54.5 in May, down from April’s 56.4 and also undershooting market expectations. Within non-manufacturing activity, the services sector held up well as travel spending rebounded during the Golden Week holiday. In contrast, the construction sector lost notable steam. Taken together, the PMI readings provide further evidence that the post-pandemic recovery is petering out, following disappointing data releases for April.

On the near-term outlook, Nomura analysts said:

“We expect the manufacturing PMI to remain in the contraction zone in June, mainly weighed on by strong headwinds from a structural property slump, a deepening global manufacturing downturn and worsening geopolitical tensions. Amid slowing income growth, mounting unemployment pressures, widespread wage cuts and weaker expectations of future income and wealth, pent-up demand for in-person services is also likely to fade in coming months.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest