Economist at UOB Group Ho Woei Chen, CFA, reviews the latest PMI releases in the Chinese economy.
Key Takeaways
“China’s official manufacturing and non-manufacturing Purchasing Manager’s Indexes (PMIs) remained in contraction in May amid prolonged pandemic lockdowns in Shanghai but the stronger-than-expected rebound from Apr suggests that China can recover quickly as lockdowns are being lifted. We expect to see further recovery in Jun.”
“The employment outlook for both the manufacturing and non-manufacturing sectors have remained weak in May despite a broad recovery in the PMIs while supply disruption is still evident. A stronger fiscal and monetary policy response remains necessary to bring the Chinese economy back to recovery.”
“Chinese blockbuster data release for May is on 15 Jun and we will be revising our GDP forecast for China at that point. A further contraction in key data such as industrial production and retail sales in May would suggest China’s GDP contracting in 2Q22.”