The factory activity in China is unexpectedly shrinking, and it records the worst decline since 2022: Caixin

Manufacturing activity in China has decreased in May as soon as possible since September 2022, a Show a special survey Tuesday, with a highlight of the impact of the high US definitions with a decrease in new export orders.

CAXIN/S&P Global Procurement Directors Index came in 48.3, and a decrease in the average Reuters of 50.6 and a sharp decrease of 50.4 in April. Less than 50, the mark separating growth from shrinkage, decreased for the first time since September last year.

The special scale was followed The second month was contracted in MayAlthough the extreme is slightly higher to 49.5 out of 49 in April, which reflects the signs of early installation in the sector. That reading was in line with Reuters expectations.

Caixin said that the decrease in foreign demand is accelerating in May, as the scale of the new export orders decreased to its lowest level since July 2023. Total new requests, an indication of the total demand, was also contracted for the first time eight months ago.

The labor market has been dark, as labor has shrunk for the second month in a row and the fastest clip since January, according to the survey.

The survey indicated that the stock of ready -made goods for the accumulated factories for the first time in four months due to the decrease in sales and delay in external shipments.

“The main macroeconomic indicators showed” uncertainty in the foreign trade environment, adding to the local economic opposite winds, “said Wang Zha, the leading economists of the Caixin Insight Group, adding that” the main total economy indicators showed a remarkable weakening at the beginning of the second quarter. “

The Special Survey, conducted in the middle of the month, covers a smaller sample than more than 500 companies directed towards export, while the official purchasing managers index-which were collected at the end of the month-appointed 3000 companies and is more closely consistent with industrial production, according to Coldman Sachs.

The non -manufactured official purchasing directors index, which covers services and construction, decreased to 50.3 in May from 50.4 in April, and remains above 50 marks since January 2023, according to LSEG data. Caixin Services in May for the month of Thursday.

US President Donald Trump stopped a 145 % tariff on Chinese imports – most of which entered April for 90 days – after a The meeting between the United States and the senior Chinese trade representatives In Switzerland last month.

The American customs tariffs on the goods imported from China decreased to 51.1 %, while Chinese fees on American imports stand by 32.6 %, according to the thought treasury. Peterson Institute for International Economy.

Chinese industrial product, which measures the value of produced goods, has grown at a slower rate of 6.1 % on an annual basis in April compared to a 7.7 % jump in the previous month.

Exports rose Better than expected 8.1 % In April of the previous year, with companies’ shipments increased to Southeast Asian countries, they compensated for the sharp decline in the goods sent to the United States

Country Industrial profits have risen for the second month In April, despite the high definitions and established denial, the current support measures in Beijing helped reduce liquidity breeds and improve the cash flows of industrial companies.

Chinese policy makers have launched a large number of measures aimed at Motivating consumption and supporting the companies damaged by the customs tariff And promoting employment. In May, the Chinese People Bank The main policy prices have reduced By 10 basis points and the rate of reserve requirements, or RRR, by 50 basis pointsReducing the amount of money that banks must keep in the reserve, which enhances liquidity in the economy.

These steps come against the background of the pressures of continuous shrinkage in China, as the lengthy housing market and job insecurity impedes investment and consumer spending.

Ting Lu, Chinese chief economist in Nomura on Tuesday, is expected to expect that “more bright movements” will have to deal with “double marriage” than stagnation in the lengthy real estate market and a continuous trade war, and Beijing is expected to take “more bright movements to clean chaos in the real estate sector.”

Retail sales were absent from expectations, an increase of 5.1 % in April of the previous year. Wholesale prices were published A sharp decrease in six months In April, stay in the shrinkage area for more than two years. Consumer prices also decreased for the third month.

Deepening a decrease in property related investment, 10.3 % decrease on an annual basis For a period from January to April.