China’s manufacturing slowdown deepened last month, as consumer and export demand weakened, a survey showed yesterday, adding to signs an economic rebound following the end of COVID-19 curbs is slowing.
Chinese leaders are under pressure to shore up the recovery after a survey found a record one-in-five young workers in cities were unemployed.
Consumer spending in April was weaker than expected and factory output declined compared with the previous month.
Photo: AFP
The monthly purchasing managers’ index (PMI) issued by the national statistics agency and an industry group retreated last month to 48.4 from April’s 49.2 on a 100-point scale. Numbers below 50 show activity declining.
The drop “suggests that the risk of a downward spiral, especially in the manufacturing sector, is becoming more real,” Nomura Holdings Inc economists said in a report.
They said the PMI was likely to remain in negative territory this month.
Chinese manufacturers have been hurt by weakening global demand after central banks in the US, Europe and Asia raised interest rates to cool inflation.
A measure of new orders fell to 48.3 last month from April’s 48.5 on a similar 100-point scale, data from the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing showed.
An index of export orders declined to 47.2 from the previous month’s 47.6.
The survey suggests “China’s economic recovery was still ongoing in May, albeit at a slower pace,” Capital Economics Ltd said in a report. “Industry is struggling and fiscal support for construction waning. But the service sector is still seeing decent gains.”
Separately, Japan’s factory output unexpectedly declined for the first time in three months in April amid a global slowdown, in a weak start to the country’s second quarter.
Industrial production edged down 0.4 percent from the previous month after two consecutive months of increases, the Japanese Ministry of Economy, Trade and Industry said yesterday.
Economists had forecast a 1.4 percent rise.
Factory machinery, metal products and automakers’ output dragged on the overall figures.
The latest results likely reflected impact from the global slowdown, overshadowing the positive effects from improving supply chains.
The weakness in domestic production is a potential drag for the Japanese economy, which has recently shown some signs of recovery, especially in the first quarter.
“It was unexpectedly weak,” Daiwa Securities Group Inc economist Kota Suzuki said. “The output for production machinery, electronic components and devices were considerably lower than forecast.”
“It reflects weakness in global demand for goods, particularly in the US and Europe. China is not doing so well either,” Suzuki said.
Additional reporting by Bloomberg
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