China Photos, Getty Images
Industryweek 21969 060117 China Flat Chinaphotos

Chinese Manufacturing Down for First Time in 11 Months

June 1, 2017
Recent indicators have pointed to slowing growth in the country, and these figures compare with an official reading Wednesday suggesting that Chinese factory activity expanded in May.

BEIJING — China’s factory activity contracted in May for the first time in almost a year, independent figures showed Thursday, hinting at deteriorating conditions for goods producers in the world’s second-largest economy.

The figures compare with an official reading Wednesday suggesting China factory activity expanded in May. Recent indicators have pointed to slowing growth in the Asian economic giant as it grapples with weaker global demand, excess industrial capacity and a burgeoning debt problem.

Investors closely watch the private Caixin Purchasing Manager’s Index (PMI) — an indicator of conditions at small manufacturers — as a sign of the country’s economic health each month. The figure came in at 49.6 for May, down from 50.3 in April and marked the first shrinkage in the sector in 11 months, Caixin said. A PMI figure above 50 marks growth while anything below points to contraction.

“China’s manufacturing sector has come under greater pressure in May and the economy is clearly on a downward trajectory,” Caixin analyst Zhengsheng Zhong said in a joint statement with data compiler IHS Markit.

Manufacturers have stopped actively replenishing fresh supplies as goods in stock have started to pile up, Zhong added.

On Wednesday, official figures focusing on larger factories came in at 51.2, slightly beating the 51 forecast in a Bloomberg News survey and unchanged from the previous month.

China is transitioning from an investment-driven economic model to one more reliant on consumer spending, which has put the brakes on growth in recent years. 

But Beijing hopes that its Belt and Road initiative, an ambitious infrastructure project aimed at reviving ancient trading routes from Asia to Europe and Africa, could provide fresh impetus for economic activity.

Copyright Agence France-Presse, 2017

Popular Sponsored Recommendations

Managing Supply Chain Risk in Aerospace and Defense!

Dec. 6, 2023
A&D companies need to adopt digital technologies that enable greater collaboration, active monitoring of leading risk indicators, & integration of supply chain risk factors into...

3D Printing a More Efficient Factory Floor

Nov. 16, 2023
Today’s additive manufacturing platforms make it simple to print a wide range of high-performing industrial parts as soon as possible and right where you need them — unlocking...

Four Keys To Operational Excellence

Sept. 20, 2023
As manufacturers face supply chain disruption and shrinking margins, increasing operations performance is critical. Our smart manufacturing guidebook can help you achieve the ...

Modern Edge Computing Accelerates Smart Manufacturing Initiatives for Discrete Manufacturers

Oct. 22, 2023
Discover how Edge Computing platforms are a requisite for discrete manufacturers to solve production challenges, accelerate digitalization, and establish a reliable infrastructure...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!