China PMI Data Indicates Improved Manufacturing Activity In May

China’s manufacturing sector fared better in May, official data showed, as more factories resumed production after the Omicron outbreak was brought under control.

The purchasing managers’ index (PMI) — a key gauge of manufacturing activity — came in at 49.6 in May, up from 47.4 in April, data from the National Bureau of Statistics (NBS) showed.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

“China’s economy took a hit from the Omicron outbreak and changes in the international situation, but it has improved in May due to the effective coordination of epidemic containment and economic and social development,” NBS senior statistician Zhao Qinghe said.

The sub-index for production stood at 49.7 in May, up 5.3 percentage points from the previous month, and the sub-index for new orders stood at 48.2, up 5.6 percentage points from April.

“Among the 21 industries surveyed, the number of industries with PMI in expansion zone increased to 12 in May from 9 in April, showing positive changes in the country’s manufacturing sector,” Zhao said.

In May, the sub-index measuring supplier delivery time rose 6.9 percentage points to 44.1, indicating that logistics remained slow despite some improvement.

The purchase price index for primary raw materials stood at 55.8, 8.4 percentage points lower than the previous month, but still running at a relatively high level.

“The PMI rebound in May shows that the impact of the epidemic has been significantly reduced, and policies to stabilize growth have begun to show effects,” said Zhang Liqun, a researcher with the Development Research Center of the State Council.

Zhang called for more effective coordination between epidemic containment and economic development, and greater efforts to unleash the potential of economic growth as soon as possible and strengthen the momentum of economic recovery. Data also showed that the PMI for China’s non-manufacturing sector came in at 47.8 in May, up from 41.9 in April.

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