Column: China’s soft economic data will mean lower commodity imports, but not yet – by Clyde Russell (Reuters – June 1, 2023)

LAUNCESTON — A run of weak economic data in China is likely to show up in softer imports of key commodities, albeit with a lag given the time taken to physically ship resources from around the globe.

The manufacturing indicator, the official Purchasing Managers’ Index (PMI), dropped to a five-month low of 48.8 points in May, the National Bureau of Statistics (NBS) said on Wednesday. This was the second month the measure was below the 50-level that separates expansion from contraction, and it was also weaker than the median forecast for a rise in May to 49.4 from April’s 49.2.

Weakness in China’s manufacturing sector has been matched by soft outcomes in other important parts of the world’s second-biggest economy. Property investment fell 16.2% year-on-year in April, the fastest since November 2022, according to Reuters calculations based on official data.

Property sales measured by floor area slumped 11.8% on year in April, the most this year, versus a 3.5% fall in March. Industrial profits fell 20.6% in the first four months of the year from the same period in 2022, according to NBS data.

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