China’s composite purchasing managers index (PMI) rose from 37.2 in April to 42.2 in May, according to a survey released by S&P Global and Caixin Media.
Below the 50 mark, which separates expansion from contraction, the PMI recorded the third straight month of contraction.
The reading reflected a gain in momentum both in industrial activity and in services. Released in the same survey, the services PMI rose from 36.1 in April to 41.4.
For Wang Zhe, an economist at Caixin, “in May, local outbreaks of covid-19 continued, and manufacturing and services activity improved slightly, but continued to contract, with services being hardest hit.”
The consequences of the pandemic on supply and demand transmitted to the labor market are deteriorating at a faster pace in the manufacturing and service sectors, he assesses.
“Long supply chains and logistical lead times still need to improve,” says Wang.
According to the economist, companies remained under great cost pressure, and the damage from the latest wave of domestic Covid-19 outbreaks could exceed that of 2020.
Source: CNN Brasil
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