China s producer prices recorded a historic drop in more than four years. This indicated that the country s manufacturing sector is struggling as the novel coronavirus crisis curbed trade flows and dragged global demand.
The producer price index (PPI) dropped 3.7% in May from a year earlier, the National Bureau of Statistics (NBS) said in a statement on Wednesday. The figure came to be the worst drop since March 2016, beating the 3.3% drop speculated by analysts. This also surpassed the 3.1% decline monitored in April.
Negative reading for PPI is likely to be a new normal in the foreseeable future, said Tommy Xie, China economist at OCBC Bank in Singapore.
The coronavirus pandemic has dragged trade to China s key export markets including the United States and Europe. This has led to a dimmer outlook for manufacturing investment and jobs in the world s second-biggest economy.
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