Workers at an aluminum automotive wheel hub factory in Binzhou city, east China’s Shandong province, May 27, 2024.
Manufacturing activity in China unexpectedly declined in May, maintaining calls for fresh stimulus as the prolonged real estate crisis in the world’s second-largest economy continues to weigh on business, consumer and investor confidence.
The National Bureau of Statistics (NBS) said on Friday that the official manufacturing purchasing managers’ index (PMI) fell to 49.5 from 50.4 in April, below the 50 points separating growth from contraction and missing analysts’ forecast of 50.4.
The disappointing figure adds to a series of recent indicators showing the $18.6 trillion economy is struggling to get back on its feet, undermining earlier optimism on better-than-expected manufacturing and trade data.
“I believe the data in particular reflects tender domestic demand, the situation in the housing sector continued to deteriorate, and retail sales were not robust,” said Xu Tianchen, senior economist at the Economist Intelligence Unit. “The reading from May may indicate a ephemeral breakdown. We will probably see improvement in June, when fresh government policies, such as the real estate rescue plan and the issuance of special treasury bonds, begin to take effect, he added.
PMI sub-indexes for fresh orders and fresh export orders fell again after 2 months of growth, while employment continued to decline.
