China’s factory activity shrinks in May amid uneven economic recovery

Official manufacturing purchasing managers’ index (PMI) fell to 49.5 in May from 50.4 in April

Non-manufacturing PMI – a measurement of sentiment in the service and construction sectors – fell to 51.1 in May from 51.2 in April

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China’s official manufacturing purchasing managers’ index (PMI) fell to 49.5 in May. Photo: AFP

Published: 9:48am, 31 May 2024Updated: 11:33am, 31 Jul 2024

Factory activity in China slowed more than expected in May, to a three-month low, reflecting the significant structural headwinds facing the world’s second-largest economy amid recent measures from Beijing to support a recovery in the property market.

The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners – fell below expectations to 49.5, from April’s 50.4, according to data released by the National Bureau of Statistics on Friday.

A reading above 50 typically indicates expansion of activity, while a reading below suggests contraction.

The new manufacturing export order subindex, meanwhile, fell to 47.2 in May from 50.6 in April.

Analysts said that the disappointing PMI data was largely driven by a decline in the output component, though new orders and export orders also softened.

Lynn Song, chief economist for Greater China at ING, said May’s factory data could signal weakness in upcoming industrial-production data.