Observers independent from the government note an increase in China's industrial output during May.
In an update from independent observers, the Chinese processing industry hasn't experienced such significant growth since May 2020. The S&P Global and Caixin consulting firm jointly revealed that their index score rose to 51.7 from 51.4. These numbers suggest an increase in production and business activity. The government's National Bureau of Statistics showcased a lower score of 49.5, indicating a somewhat slower production rate despite a positive development in the broader Chinese processing industry.
Caixin highlights that an "improved business climate" results from a "rieving influx of new orders," but "cautious employers" are hesitant to increase workforce. This trend puts further pressure on the country's labor market conditions, leading to a decline for the ninth consecutive month in May. The difference between Caixin's index and the official numbers hints at varying growth patterns within the Chinese industrial landscape. State-owned conglomerates are the focus of the official figures while small to medium private companies are examined in the Caixin survey.
The Chinese economy still deals with the repercussions of the pandemic and the subsequent lockdowns. Consumer sentiments remain poor, and there exists a mounting real estate crisis affecting a significant number of people. Furthermore, a reluctant global economy and international strains with the US add to the pressures faced by the export-reliant Chinese economy.
"Unresolved issues will take time to remedy," said Wang Zhe, a Caixin economist. "A more urgent and consistent approach is needed towards stimulating domestic demand and improving the job market situation."
