China’s Manufacturing PMI Slumps to 48.8 in May

Data source: Visual China

BEIJING, May 31 (TiPost) – Following a robust rebound in the first quarter, the manufacturing purchasing managers’ index (PMI) published by the National Bureau of Statistics (NBS) is experiencing a continuous decline in the second quarter.

According to the latest data released by the NBS on Wednesday, the manufacturing PMI for May 2023 stood at 48.8, a decline of 0.4 percentage point from the previous month. The non-manufacturing business activity index recorded 54.5, a decrease of 1.9 percentage points from the previous month.

Most sub-indices of the manufacturing PMI continued to fall in May. The manufacturing production index and new orders index registered 49.6 and 48.3 respectively, marking declines of 0.6 and 0.5 percentage point compared to the previous month. Notably, the production index dipped below the critical threshold of 50 for the first time since February, while the new orders index remained within the contraction range for two consecutive months.

Amid a deceleration in the global economic recovery, the new export orders index in May continued its decline in the contraction range, standing at 47.2 after a drop of 0.4 percentage point from the previous month. The import index fell by 0.3 percentage point to 48.6 in May.

The employment index for May was 48.4, showing a decline of 0.4 percentage point compared to the previous month. This marks the third consecutive month in which the index has remained within the contraction territory.

Impacted by the continued decline in some commodity prices and subdued market demand, the major raw materials purchasing price index and the ex-factory price index in May hit their lowest levels since August 2022. Particularly, the price indices for oil, coal and other fuel processing, chemical raw materials and products, and ferrous metal smelting and calendaring, among other industries, were all below 31, indicating relatively low market activity in the upstream and downstream sectors of these industries.

The index of projected business activities reached 54.1 in May, representing a slight decline of 0.6 percentage point from the previous month. However, it was 0.2 percentage point higher than the same period last year, indicating companies’ optimism about the near-term outlook.

Among the sub-indices of the manufacturing PMI, the supplier delivery time index was the only one to rebound from the previous month, showing an increase of 0.2 percentage point to reach 50.5. This index has now remained within the expansion range for the fourth consecutive month, suggesting a continuous improvement in logistics and supply chain conditions.

In terms of enterprise size, the PMI for large enterprises rose to a tipping point in May. However, the PMI for medium and small enterprises experienced a continued decline, remaining below the critical threshold for two consecutive months.

In contrast to the decline in the manufacturing industry, the service industry continues to showcase fast recovery. The business activity index for the services sector came in at 53.8 in May, down 1.3 percentage points from the previous month.

In terms of specific industries, the May Day holiday has driven the momentum in tourism, travel, and offline consumption sectors. Industries such as railroad transport, air transport, accommodation, and catering have seen business activity indices remain above 55.

Telecommunications, radio, television, and satellite transmission services, as well as internet software and information technology services, are experiencing robust development, with their indices surpassing 60 and exceeding the overall service industry level. Nevertheless, capital market services and real estate industries remain within the contraction range.

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