In May, Caixin China'S Manufacturing PMI Rose To 50.7 And Returned To The Expansion Section.

With the relaxation of the epidemic prevention and control measures and the resumption of production and business, the Caixin China manufacturing industry purchasing managers index (PMI) released in June 1st was 50.7, an increase of 1.3 percentage points over April, the highest since February, and the return to the expansion section in May.

This trend is not consistent with the PMI of the National Bureau of statistics. The PMI released by the National Bureau of statistics in May was 50.6, down from 0.2 percentage points last month.

With the gradual return to normal operation of enterprises, manufacturing industry has been rebounded for three consecutive months, and the production index in May has been the highest since February 2011. Production recovery is obviously faster than demand, dragged down by the weakness of external demand, although the new orders index has rebounded slightly from last month, it is still in the contraction zone. In order to curb the spread of the epidemic, many countries have implemented strict measures, including shutting down production and closing operations. Although the new export orders index has picked up, it has been in the contraction area for five consecutive months.

The sluggish demand has led manufacturing companies to contract labor for five consecutive months, but the slowdown has slowed. The enterprises surveyed generally indicated that they planned to cut down their manpower due to insufficient demand. Some enterprises claimed that they did not fill the vacancy after their voluntary separation. The acceleration of production and the reduction of new orders in enterprises have led to the first fall in the backlog of workload since February 2016.

In May, China's Manufacturing Purchasing inventory continued to decline, and many respondents said that in view of the sluggish demand and at the same time, in order to control costs, the inventory was adjusted again. Due to the need to deliver orders and low demand to reduce inventory, the finished product inventory index dropped and returned to the contraction interval.

The purchase price of raw materials contracted for four consecutive months, but the decline slowed down. Manufacturers generally reflected that metal, oil and other raw materials prices, driving costs down. As the market stabilizes, the manufacturer basically keeps the price of the product unchanged, and the factory price index returns to the critical value, breaking the three consecutive month of downward trend.

With the expected improvement in the epidemic situation, the global economic situation will become stronger. The Chinese manufacturing sector will have confidence in the coming year and optimism will expand in the expansion area.

Wang Zhe, senior economist at Caixin think tank, said that the recovery period of the domestic economy after the epidemic was obviously stronger than demand, and that the epidemic situation was still spreading, and the export weakness was a serious drag on demand side. This year's two sessions government work report did not mention the GDP growth target, with emphasis on "six stability" and "six guarantees", and employment was the first to bear the brunt. Caixin China manufacturing PMI employment index has contracted for five consecutive months, and the task of promoting employment is still arduous and heavy.