China’s manufacturing activity contracted again in May

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BEIJING: Readings on Chinese factories and services activity improved in May as more cities in the country emerged from the blockades and officials took steps to boost a slow economy, although indicators indicated a contraction of economic activity.

The official index of purchasing managers in China’s manufacturing industry rose to 49.6 in May, the National Bureau of Statistics said on Tuesday, rising from 47.4 in April and surpassing the median of 48.9 forecasts of economists surveyed by The Wall Street Journal. The result is still below the 50 mark that separates expansion from contraction and marks the third consecutive month of contraction in activity.

Several sub-indices including factory production, export orders and new orders showed an improvement as production and manufacturing demand recovered to varying degrees, said Zhao Qinghe, a senior official at the statistics office. “But the momentum for recovery has yet to be strengthened,” he added.

According to the statistics office, the factory production sub-index rose to 49.7 in May from 44.4 in April. The subscript measuring total new orders rose to 48.2 in May from 42.6 in April. Likewise, the export order tracking subscript rose to 46.2 in May, from a reading of 41.6 the previous month.

While the world’s second-largest economy continues to suffer from China’s zero-tolerance approach to the Omicron variant, which has halted factory production and clogged logistics networks, the data adds signs of gradual improvement.

“In May, the resumption of labor and production in the regions that were severely affected by the epidemic gradually improved,” he said. Zhao. The monitoring index of the largest companies returned to the expansionary territory at 51.0, he added.

Separately, China’s official non-manufacturing PMI, also released on Tuesday, rose to 47.8 in May from 41.9 in April. The index tracks activity in the service and construction industries.

Seventeen of the 21 industries surveyed that tracked the non-manufacturing PMI, including transportation sales and retail sales, saw an expansion in activity, compared to 19 industries that saw a contraction in activity in the UK. April, the statistics office said.

The service activity measurement sub-index rose to 47.1 in May from 40.0 in April, while the construction activity monitoring sub-index fell to 52.2 from 52.7 in April.

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