BEIJING (Reuters) – China’s factory activities in China grew at a slower pace in May, but the momentum in the services and construction sectors accelerated, indicating an inconsistent recovery in the world’s second largest economy as companies resume their business following measures to tackle the Coronavirus.
Manufacturing industries slowed for the second month in a row, despite activities recovering from unprecedented low levels recorded in February when the government imposed strict travel restrictions and isolation rules and suspended work at factories to curb the spread of the disease.
China’s factory activities
According to the data of the National Bureau of Statistics, the official purchasing managers ’price index in the industrial sector fell to 50.6 in May from 50.8 in April, but remains above the 50-point level separating growth and contraction compared to the previous month..
Analysts had expected a reading of 51 points.
Export orders recorded a decline for the fifth consecutive month, and its sub-index recorded 35.3 in May, a significant decrease from the level of 50 points, as the Corona pandemic hit global demand..
The survey showed that factories reduced the number of workers for the first time since the resumption of their activities. The sub-index fell to 49.4 from 50.2 in April, the survey showed.
In May, the PMI for SMEs fell to 48.8 from 50.8, while large companies announced a faster expansion of activities..
In an encouraging sign, an index that measures total new supply orders improved to 50.9 from 50.2 in April, which could signal an imminent acceleration in domestic demand..
The new orders for the construction sector increased to 58, compared to 53.2 the previous month, and companies in the sector also accelerated the pace of employment.
The official services PMI rose to 53.6 in May from 53.2 in April, also a sign of what may be a slow improvement in corporate confidence in the sector and consumers..
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