China May Factory Activity Contracts Faster than Expected - Modern Distribution Management

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China May Factory Activity Contracts Faster than Expected

Economists polled by Reuters had expected China's manufacturing PMI to increase slightly in May.
January 2021 economic indicators

China’s factory activity unexpectedly contracted for a second straight month in May, according to data released by the National Bureau of Statistics (NBS) on May 31.

The country’s manufacturing purchasing manager’s index (PMI) fell to a five-month low of 48.8 in May, down from 49.2 in April. The decline of 0.4, which sunk China’s PMI further into contraction territory (any reading below 50), contradicted economists polled by Reuters, who expected an increase to 49.4.

Service sector activity in China expanded in May, albeit at its slowest pace in four months, with the non-manufacturing PMI registering at 54.5, down from 56.4 in April.

The PMI subindexes for May showed that factory output rose into expansion territory while new orders, including new exports, fell for a second straight month. Chemical, ferrous metal smelting and rolling processing industries experienced significant declines in production and demand, according to the NBS.

In the services sector, rail and air transport, accommodation and catering expanded while real estate activity fell.

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