China Manufacturing Sector Unexpectedly Shrinks

2025-06-03 01:53 By Chusnul Chotimah 1 min. read

The Caixin China General Manufacturing PMI unexpectedly declined to 48.3 in May 2025, down from April’s 50.4 and missing forecasts of 50.6, marking the first contraction in the sector in eight months.

The latest reading also represented the steepest decline since September 2022, as output shrank for the first time in 19 months and at the fastest pace since November 2022, while new orders contracted at the sharpest rate since 2022.

At the same time, foreign sales fell to their lowest level since July 2023, amid ongoing uncertainty in the external trade environment.

Employment continued to decline, purchasing activity weakened, and supplier lead times lengthened marginally.

On the price front, input costs fell for the third consecutive month, driven by lower energy and raw material prices.

Output prices also declined, marking the sixth straight monthly drop amid heightened competition.

Finally, business sentiment strengthened, supported by hopes of improvements in trade conditions.



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