From Elliot Clarke:
There was little new information in the headline China manufacturing PMI results for May other than confirmation that the sector remains under duress. The official NBS measure was unchanged at 50.1, while the Caixin PMI edged 0.2ppts lower to 49.2. Also released today, the official non-manufacturing PMI deteriorated from 53.5 to 53.1.
…..For manufacturing, both new order indexes deteriorated in May, to (a still expansionary 50.7) for the NBS survey and a (contractionary) 49.7 for the Caixin measure. This modest discrepancy corresponds to the greater external focus of the Caixin measure and the poor state of global demand. Export orders are falling according to Caixin respondents and are static amongst NBS’ survey participants.
Stocks of finished goods continue to contract, yet the absence of orders means that a pipeline of new work is struggling to build. On that basis, it seems unlikely that production will strengthen materially in the near term.
Currently production is best described as stagnant…..
Given the production and orders detail, it is unsurprising that employment continues to contract outright, at 48.2 and 46.3 respectively for the NBS and Caixin surveys.