Eng
China's factory activity in May shrank for the first time in eight months, indicating U.S. tariffs are now starting to directly hurt the manufacturing superpower.
The Caixin/S&P Global manufacturing PMI fell to 48.3 in May from 50.4 in April, missing analysts' expectations in a Reuters poll and marking the first contraction since September last year. It was also the lowest reading in 32 months. (The 50-mark separates growth from contraction.)
The result is broadly in line with China's official PMI that showed factory activity fell for a second month.
According to the Caixin survey, new export orders shrank for the second straight month in May and at the fastest pace since July 2023. Producers said the U.S. tariffs restrained global demand.
That dragged down overall new orders to the lowest since September 2022. Factory output meanwhile contracted for the first time since October 2023. Employment in the manufacturing sector declined at the sharpest pace since the start of this year, as producers cut headcount.
Output prices have fallen for six straight months due to intense market competition.
Source: reuters.com