The Strategist

China’s PMI falls short of forecasts in May

06/01/2023 - 11:06

China's manufacturing activity index (PMI) was only 48.8 points in May, according to the National Bureau of Statistics of China, which indicates a fall in activity (less than 50 points).

The May index dropped to a five-month low, the level from last December, when China relaxed COVID-19 restrictions, and fell below the forecast of 49.2 points by analysts surveyed by Reuters.

Investors were disappointed by data showing that China's economic recovery is really slowing down. As a result, the major stock indices in the Asia Pacific region started to fall after the numbers were released: Australia's ASX fell 1.6%, Hong Kong's Hang Seng dropped 2%, and Japan's Nikkei 225 lost 1.5%.

According to experts, the weak demand for Chinese goods abroad and home economic issues, particularly in the real estate market, are to blame for the country's declining industrial activity index. Chinese exports have already grew by 8.5% in April, a marked decline from the 14.8% surge in March.