On Monday, the China National Statistic Institution published the Manufacture PMI data. That was slowing down from 51.1 to become 51.0 on May. It means that the data is slightly underpressured.
However, it was still in the expansion path or above the level of 50.0. The slowed down manufacture expansion is caused by the expensive price of the raw materials.
That situation triggers the high production cost. The examples are like the iron ore, copper, and coal. Their prices are increasing because of the global demand after the declining economy happened last year.
The Supply Bottlenecks and its Impact
Furthemore, the supply bottlenecks is still shadowing the industry production. It is especially for the small companies and the enterprises with the export orientation. The data details show it.
From the details yesterday morning it can be seen that the sub-index of the raw materials increased from 66.9 to become 72.8. Meanwhile, the export orders slipped from 50.4 to 48.3.
That was followed by the small companies index which was also slipped from 50.8 to 48.8. In General, the increasing commodity price in several last months has a great impact for the Chinese industry.
It is because the raw commodity will move the production cost and at last it may increase the price of a final material. That condition can trigger the low demand to some goods which are getting more expensive.
The Acts taken by the Government
The Chinese government has repeatedly expressed their concern over rising commodity prices in recent times. They support surveillance efforts and decisive action against commodity speculators.
It is especially to those which have the potential to harm china's economy. Aside from the increasing commodity proven which is weighting on the manufacture activities, there is one thing to note.
A report stated that the Chinese service sector in May was increasing from 54.9 to 55.2. That extends the good record in a row in the last 15 months. How is it possible?
Many parties think that it is because China is quite good to handled the coronavirus pandemic spread and press the infected people numbers. They can make the public to visit the public facilities again.
The Industrial Production in Japan
On Monday, the Japanese statistic institution published the industrial production data which increased by 15.4% year-on-year in April. That number is better than the 3.4% value gotten in its last period.
In the monthly basic, the Japanese industrial output was also higher. That was from 1.7% to 2.5%. It was lower than the 4.1 percent expectation made by the economic expert votes before.
Mostly, the industrial production in Japan noted the quite impressive progress in the beginning of second quarter this year. There is a reason for that condition.
The increased production of general-purpose and electric machinery was able to offset the contraction in the production of transportation. It is also related to the automotive engines amid a scarcity of supply of semi-conductor chips.
Why the Industrial Production can Increase?
The great progress happened on the industrial production is mostly caused by the delivery increase to the USA and China. The economy activity recovery in those countries make the machinery goods demands from Japan are higher.
The producers surveyed by The Ministry of Trade and Industrial Economics expects Japan's industrial output to slump 1.7 percent in May. However, they will then rebound 5.0 percent in June.
Overall, the government maintains a positive outlook in Japan's industrial sector as the global economic outlook is expected to return to normal in line with the widespread distribution of THE COVID vaccine.
Meanwhile, the retail sales in that country was also up from 5.2% to become 12% year-on-year in April. It has the significant increase, but it is still lower than the 15.3 percent expectation.
