Factory activity in China slowed in May as COVID-19 restrictions in major industrial centers were eased, but mobility restrictions continued to impact on demand and production, casting doubt on the second quarter’s economic growth.
The official manufacturing purchasing managers’ index (PMI) rose to 49.6 in May from 47.4 in April, the National Bureau of Statistics (NBS) said on Tuesday, beating forecasts in a Reuters poll of 48.6.
Activity in China’s manufacturing sector picked up in May but remained below the 50-point mark that separates growth from contraction for a third straight month.
Analysts say the impact of COVID-19 curbs in May have not fully ended, leaving the economic outlook grim for the second quarter of this year and beyond.
Both Japan and South Korea reported sharp declines in output last month.
Many analysts expect China’s economy to shrink in the April-June quarter, compared with the first quarter’s 4.8% growth.
Retail sales shrank 11.1% in April from a year earlier, the biggest contraction since March 2020.
The official non-manufacturing PMI in May rose to 47.8 from 41.9 in April, but services remained soft.
The employment sub-index in the services sector slipped to 45.3, down 0.5 a point from April, indicating sustained job market pressure.
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