Loosening of anti-covid measures and stimulus to the economy had an effect, despite sectors not registering expansion
The Chinese government released on Monday (May 30, 2022) the industrial and service sector results In may. Faced with the loosening of restrictions to contain Covid-19 and measures to stimulate the economy, the indicators showed improvements, but did not register growth in the sectors.
The industrial PMI – an index that measures business conditions in the industry – rose from 47.4 in April to 49.6 in May. Despite the improvement, the result indicates a contraction in activity. It is considered sector expansion when the index reaches or exceeds the 50 mark. This was the 3rd consecutive month of contraction of the industrial sector in China.
Zhao Qinghe, an official with the National Bureau of Statistics, noted the advance of several sub-indices, such as factory production, which rose to 49.7 in May from 44.4 the previous month; new orders, which went from 42.6 in April to 48.2 in May; and that of export orders, from 41.6 to 46.2. The sub-index that measures the results of larger companies showed expansion again and is at 51.0.
“In May, the resumption of work and production in regions heavily affected by the epidemic gradually improved.” said Zhao. However, he admitted that “the momentum of recovery still needed to be strengthened”.
The reality of the services and construction sector is similar: the PMI rose to 47.8 in May, compared to 41.9 in April. The services sub-index dropped to 47.1 in May from 40.0 in April, while the construction sub-index dropped from 52.7 to 52.2 over the same period.
Of the 21 sectors tracked by the non-manufacturing PMI, 16 registered expansion of activity. In April, there were only 2.
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