China's Manufacturing Purchasing Managers Index (PMI) fell to 48.8 in May, although it was expected to rise from 49.2% in April, according to data released by the National Bureau of Statistics (NBS) today (Wednesday, May 31). This is also the lowest PMI in the last 5 months. The decline in PMI, which is an important data reflecting the economic course, is interpreted as a recession signal both in China and around the world. Cryptocurrencies, especially Asian markets, are negatively affected by this data.
A PMI value below 50 indicates contraction, while a PMI value above 50 is interpreted as a growth signal. When we look at the data in detail, we see that 11 of 21 sub-sectors are in the growth zone.
Recently, Asian manufacturing data have been negative. The slowdown in production, especially in Japan and South Korea, brings with it weak manufacturing data. In China, which has started to fully recover after the pandemic, the desired levels have not been reached yet.
What Is Its Impact on Cryptocurrencies?
Underwhelming data from China, one of the two largest economies in the world, has adversely affected the cryptocurrency market, especially Bitcoin (BTC). The PMI data, which has indicated economic contraction, strengthens the perception that growth figures may fall globally.
What Is the Purchasing Managers’ Index (PMI)?
The Purchasing Managers Index (PMI) is an important index that shows the direction of the economy or trends in areas such as manufacturing or services. It shows the direction of the market from the point of view of the purchasing managers of the companies. It provides important data that shows us the economic situation in terms of growth or recession. A PMI value below 50 indicates contraction, while a PMI value above 50 is interpreted as a growth signal.