China's May factory activity flat as weak demand slows growth

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BEIJING: China's factory activity was flat in May after two months of expansion, official data showed Sunday (May 31), as weaker demand and rising energy costs due to the Middle East war weighed on growth.

The manufacturing purchasing manager's index - a key measure of industrial activity - was 50.0 in May, according to the National Bureau of Statistics (NBS).

The 50.0 mark separates expansion from contraction.

Economists surveyed by Bloomberg had predicted a reading of 50.0 as well.

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The figure slipped from 50.3 in April and 50.4 in March.

The slowdown comes as the Middle East war, which has effectively halted shipping through the Strait of Hormuz, a key oil and gas route, drives up global energy costs and pressures manufacturers.

Chinese factories are facing higher costs with the prices of raw materials rising, particularly in the energy and chemical sectors.

Both supply and demand in industries including petroleum, rubber and plastics showed "continued weakness", said NBS statistician Huo Lihui.

Overall business production and activity in the manufacturing sector remained stable, Huo said, adding that there was "a slight slowdown in market demand" for new orders.

China, the world's second-largest economy, has been struggling with a slowdown in domestic demand and investment in recent years that has been weighing on its vast manufacturing sector.

Despite factory data edging lower, China's non-manufacturing PMI - a gauge of activity across services and construction - grew to 50.1 in May, up from 49.4 in April.

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