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Chinese Manufacturing PMI Continues Decline in May

Xinhua recently reported that the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing jointly released China’s May Manufacturing Purchasing Managers Index (PMI) data. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 percent typically reflects business contraction.

The May manufacturing PMI was 48.8 percent, down 0.4 percentage point from the previous month. Statistics show that both production and demand have slowed down. In May, the production index and new order index were 49.6 percent and 48.3 percent respectively, down 0.6 and 0.5 percentage point from the previous month. Chinese market demand for manufacturing is still short, and the release of production capacity is restrained. The raw material inventory index was 47.6 percent, a decrease of 0.3 percentage points from April, showing continued decline in the manufacturing industry’s main raw material inventory. The employment index was 48.4 percent, a decrease of 0.4 percentage point from April, indicating the end of the post-COVID employment boom in manufacturing enterprises. The PMI of large enterprises was 50 percent, 0.7 percentage point higher than the previous month. However, the PMIs of medium and small enterprises were 47.6 percent and 47.9 percent respectively, down 1.6 and 1.1 percentage points from the previous month — the prosperity of small and medium-sized enterprises was still weak.

(1) Xinhua, May 31, 2023
(2) Chinese National Bureau of Statistics, May 31, 2023