China’s National Bureau of Statistics (NBS) published critical manufacturing data on April 30. A decrease in these figures indicates a worsening slump in the world’s second-largest economy.
In April, the manufacturing Purchasing Managers’ Index (PMI) was 47.4, down 2.1% from the previous month. This rate is also lower than the critical 50-point mark separating expansion from contraction, presenting that the overall prosperity level of the manufacturing industry keeps declining.
In terms of enterprise-scale, the PMI of large enterprises decreased by 3.2% to 48.1. The PMIs of medium and small enterprises saw a drop of 1% to 47.5 and 45.6, respectively. All of the figures were below the critical point.
The five sub-indices that make up the manufacturing PMI experienced the same pattern, falling into the 37 – 44 range. They include production, new orders, inventory levels, supplier deliveries, and employment.
Zhao Qinghe (赵庆河 zhàoqìnghé), an NBS senior statistician, said that this round of outbreaks was wide and frequent in many areas. Some businesses have had to cut or suspend production, while others have undergone increasing transportation difficulties.
Besides, China’s non-manufacturing PMI measuring sentiment in the services and construction sectors continued its slowdown. Its April index fell to 41.9, the lowest level since early 2020, as the nation prepares for a muted Labor Day vacation.
As reported by Bloomberg, Nomura Holdings Inc. economists previously stated that China’s economic downturn deepened in the first quarter, and markets should be concerned about a further slide in the second.
Nomura chief China economist Lu Ting (陆挺 lù tǐng) projected PMIs to fall further due to escalated lockdowns and social distancing measures. He added that the zero-covid strategy China determined to maintain would likely impose a severe blow on the country’s economy.