In May 2025, the Caixin China Manufacturing Purchasing Managers’ Index (PMI) recorded 48.3, a decrease of 2.1% from the previous month. This is the first time in eight months that the index has fallen below the 50 line, and it is the lowest value since October 2022.
The data released by Caixin on Tuesday, June 3, shows that the Caixin China Manufacturing PMI dropped from 50.4 in April to 48.3 in May.
According to Caixin, the market sentiment in May deteriorated, with a significant contraction in supply and demand. The new orders index in the manufacturing sector fell below the 50 line for the first time in nearly eight months, marking the lowest point since October 2022. Weak external demand is a key reason for the contraction in supply and demand, with manufacturing exports declining for the second consecutive month. The new export orders index hit its lowest point since August 2023. The decline in demand for investment goods is more pronounced than other categories.
Due to weak demand, the manufacturing production index fell into contraction territory for the first time in nearly 19 months, reaching a new low since December 2022.
Employment in the manufacturing sector continued to decline. In the past 9 months, the employment index has been below the 50 line for the 8th time. Companies are facing significant market pressures and are cautious about increasing employment. With weak demand, companies are still working through backlogs of orders.
Manufacturing prices continue to be depressed. With weak supply and demand, factory prices have been in contraction territory for the sixth consecutive month. In terms of costs, energy and chemical raw material prices have fallen, with the purchasing price index below the 50 line for the third consecutive month.
Wang Zhe, a senior economist at the Caixin think tank, stated that there are multiple unfavorable factors affecting current economic development, including increased uncertainty in the external trade environment and internal challenges. At the beginning of the second quarter, major macroeconomic indicators have significantly weakened, leading to increased downward pressure on the economy.
The official PMI for the manufacturing sector in May, released by the Chinese government, rose from 49.0 in April to 49.5 but still remains in contraction territory, indicating ongoing challenges for the industry.
The Caixin PMI is considered to be more reflective of the trends of export-oriented enterprises and small businesses.