In May, China’s production growth surged at its fastest rate since June 2022, particularly in the consumer segment. This was driven by higher new work inflows, fueled by strong domestic and global demand for new products. While new export orders grew at a slower pace than in April, some respondents mentioned that recent trade fairs and expansion into overseas markets helped generate new work. Despite this, the sluggish global economy remains a limiting factor.
According to Wang Zhe of the Caixin Insight Group, policies need to be reinforced and consistent in order to stabilize the economy, boost domestic demand, and increase employment. Factories increased their purchasing activity to meet production demands, with purchasing quantity growing at the quickest rate in three years. Producers also showed improved sentiment in May, expecting market demand to strengthen both domestically and internationally.
However, rising costs of metals, plastics, and energy contributed to an increase in average input costs. Input price inflation was at its highest since October. Despite this, job losses continued for the ninth consecutive month. Some makers of consumer goods did see a slight increase in staffing levels, providing a glimmer of hope amid challenging economic conditions in China.
