China's PMI notes a smaller contraction in May and points to the beginning of the recovery

MADRID, 31 May. (EUROPA PRESS) -

The activity of Chinese companies during the month of May contracted for the third consecutive month, although the fall has been substantially cushioned, according to the official data of the purchasing managers' index (PMI), published by the National Statistics Office (ONE) , which points to the beginning of the recovery after the impact of the restrictions implemented to contain the Covid-19 pandemic.

In this way, China's manufacturing PMI stood at 49.6 points in May from 47.4 in April, with a reading of 51 points in large companies and 49.4 in medium-sized companies, as well as 46 .7 in the small ones, compared to 48.1, 47.5 and 45.6 points, respectively, in April.

The data on new orders for the Chinese manufacturing industry has improved in May to 48.2 points, compared to 42.6 in April, although it continues to show a contraction, while manufacturing employment has also partially slowed its fall, with a result of 47.6 points, compared to 47.2 the previous month.

As for non-manufacturing companies, the PMI for May has risen to 47.8 points from 41.9 in April, completing three months of contraction, with a reading of 52.2 points, compared to 52.7, in the case of construction, and 47.1 integers from 40 in services.

Thus, the composite PMI index for the Chinese economy stood at 48.4 points in May, compared to 42.7 in April.

"Although lower than the threshold (of 50 points), they were significantly higher than those of the previous month, after factors such as the recent epidemic situation and changes in the international situation have had a great impact on economic performance," said Zhao Qinghe. , senior statistician at the Service Industry Survey Center of the National Statistical Office.

In this regard, the Chinese official stressed that with the effective coordination of epidemic prevention and control and economic and social development, "China's economic prosperity has improved compared to April."

On his side, Sheana Yue, an analyst for China at Capital Economics, stated that the official PMIs add to the broader evidence that activity has begun to recover in the country as containment measures were reversed, although he considers it likely that the recovery "remains tepid amid weak external demand and labor market tensions."

"In the short term, we expect a further recovery in activity amid falling infections and easing of restrictions, particularly in Shanghai and Beijing. That said, we doubt a strong rebound is likely given headwinds." of external demand and the smaller scale of policy easing compared to 2020," Yue added.