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China Lockdowns Impacted on 49% of Companies

All-Sector Sales Managers Index fell in May to levels not seen for over two years
The First Data on Economic Activity Levels in China - Every Month
The only survey with current month, month-on-month, monthly year-on-year, and forward looking questions

Updated: May 25, 2022

The May Sales Managers Index illustrates dramatically the heavy toll being taken on the Chinese economy by the continuing Government attempts at preventing the spread of Covid. Some 40 cities are now reported as affected accounting for almost a third of GDP.

Manufacturing has been particularly badly affected with factories unable to operate entirely closed off from supply chains. The Manufacturing Market Growth Index came in at a 25 month low in May, with a reading of 45.3, even lower than the April reading of 46.9.

Manufacturing sector continues to contract at fastest rate for over 2 years

Market Growth Index for Manufacturing Sector
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 China|#0A66C2|48.5, 45.4, 46.1, 44.6, 47.1, 47.1, 47.5, 46.6, 46.8, 48, 49, 48.7, 49.8, 50, 51.7, 51.5, 51.2, 52.2, 52.2, 53.9, 51.9, 50.2, 48.6, 49.7, 51.4, 50.3, 50.5, 46.9, 45.3 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022




Business Confidence in the Manufacturing sector registered a 27 month low, and the Staffing Index and overall Manufacturing Sales Managers Indexes also registered two year lows. The low level recorded by the Staffing Index is particularly significant as the Index records year on year growth (or decline in this instance), as opposed to month on month changes.

Manufacturers continue jobs lay-off

Staffing Levels Index for Manufacturing Sector
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 China|#0A66C2|49.5, 47.8, 49.3, 47.8, 46.5, 47.9, 48.8, 50, 50, 51.5, 51.9, 50.5, 51.2, 50.9, 51.7, 50.7, 50.2, 50.5, 52.2, 51.4, 49.8, 50.9, 50.3, 50, 50.3, 50.2, 51, 48.6, 47 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022




The Services sector did a little better, with Business Confidence bouncing back into the >50 positive growth zone, and the month-on-month Sales Growth Index reflecting a significant increase in May compared to April. However the more general Services Market Growth Index stayed low with a reading of 46 indicating further contraction in service sectors throughout China.

Further contraction in service sector throughout China evident

Market Growth Index for Service Sector
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 China|#0A66C2|47.4, 43.8, 47.2, 44, 47.2, 45.8, 46.2, 49.2, 50.6, 50.4, 50.4, 50.4, 51.8, 52.4, 50.2, 52.4, 51.8, 51.4, 52.8, 51.4, 51.6, 52.6, 51.6, 51.4, 50.4, 50.4, 48.8, 44.9, 46 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022




One other worrying sign was highlighted by sharp rises in the Prices Indexes in both Manufacturing and Service sectors. The overall Manufacturing + Services Price index rose from 50.5 in April to 53.1 in May. Recent media comments about the positive signs being recorded in Chinese export data are likely to be resulting from renewed price increases rather than volume sales changes.

Strong inflationary pressures remain in the Indian economy

Prices Charged Index: Manufacturing (Blue) & Services (Red)
Source: World Economics
Note: Data Shown as a Diffusion Index. (50 = 'No Change', above 50 = Increasing growth, below 50 = Declining growth)
0 0 0 Manufacturing|#0A66C2|50.7, 49.2, 52.7, 49.7, 50.2, 47.1, 48.5, 46.8, 45.1, 47.5, 47.6, 47.6, 47.8, 47.4, 43, 45.2, 47.1, 57.4, 55.7, 52.4, 53.9, 56.7, 59, 55.9, 53.3, 50.7, 51.9, 51.7, 53.6 Services|#C00000|50.4, 47, 49.4, 44.4, 47, 49, 49.8, 51.4, 51, 51, 51, 51, 52.2, 51.8, 53.6, 52.2, 52.6, 55.6, 51, 51.2, 53.5, 53, 52.8, 50.4, 49, 52.2, 53, 49, 52.4 Jan 2020, Feb 2020, Mar 2020, Apr 2020, May 2020, Jun 2020, Jul 2020, Aug 2020, Sep 2020, Oct 2020, Nov 2020, Dec 2020, Jan 2021, Feb 2021, Mar 2021, Apr 2021, May 2021, Jun 2021, Jul 2021, Aug 2021, Sep 2021, Oct 2021, Nov 2021, Dec 2021, Jan 2022, Feb 2022, Mar 2022, Apr 2022, May 2022






About the Sales Managers Indexes

The Sales Managers' Indexes provide the earliest monthly data on the speed and direction of economic activity in key growth areas of the world.

The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of companies stratifying all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

Key advantages of the SMI's:

  • The SMI's provide the first indication each month of the speed and direction of economic growth.
  • The SMI's provide the most complete indication of growth, covering all private sector activity.
  • The SMI's are based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.
  • The SMI survey base - salespeople - are used by virtually all businesses, including in frontier markets, unlike other occupational groups.
  • The SMI's focus on the key countries contributing to over 60% of China growth in recent years.






About the Data

SMI data for China is published as diffusion indexes to gauge the speed and direction of economic activity.

Monthly data since 2013 is downloadable for all-sectors, manufacturing and service sectors separatly in a consistent unadjusted format for 7 key indexes: