According to a survey conducted by Caixin, the production growth in China’s manufacturing sector was supported by higher new work inflows as both domestic and global demand increased. In May, output saw the fastest growth since June 2022, particularly in the consumer segment. Wang Zhe from Caixin Insight Group emphasized that policies aimed at stabilizing the economy, boosting domestic demand, and increasing employment should be strengthened and consistent to support this growth.
New export orders grew at a slower pace than the previous month, with some respondents attributing new work to recent trade fairs and others mentioning strategic expansions into overseas markets. However, the global economy’s lackluster performance remains a limiting factor. Despite these positive indicators, employment in the manufacturing sector continued to be weak, with job losses persisting for the ninth consecutive month. However, makers of consumer goods saw a slight increase in staffing levels.
Manufacturers increased their purchasing activity to meet production needs, with the quantity of purchases growing at the fastest pace in three years. Producers’ sentiment improved in May as they anticipated a rise in market demand both domestically and internationally. Rising prices for metals, plastics, and energy led to an increase in average input costs, with input price inflation at its highest since October. The prolonged property crisis has also impacted China’s economy by affecting business and consumer confidence.
