National Bureau of Statistics (NBS): PPI fell 0.4% MoM and 3.3% YoY in May, with prices in some sectors showing marginal improvement.

According to data from the National Bureau of Statistics (NBS), the Producer Price Index (PPI) for industrial producers fell by 0.4% MoM in May, the same rate of decline as the previous month. On a YoY basis, it decreased by 3.3%, with the rate of decline expanding by 0.6 percentage points compared to the previous month. The main reasons for the MoM decline in PPI this month are as follows: Firstly, international imported factors influenced the price decline in related domestic industries. The downturn in international crude oil prices affected the price decline in domestic petroleum-related industries, with prices in the oil and natural gas extraction industry falling by 5.6%, prices in refined petroleum product manufacturing falling by 3.5%, and prices in the chemical raw materials and chemical products manufacturing industry falling by 1.2%. Collectively, these three industries contributed to approximately 0.23 percentage points of the MoM decline in PPI, accounting for over half of the total decline. Secondly, there was a phased downturn in the prices of certain domestic energy and raw materials. Coal demand was in the off-season, with sufficient coal reserves at power plants and ports. Additionally, the low cost and strong substitution effect of new energy power generation led to a 3.0% decline in prices in the coal mining and washing industry and a 1.1% decline in coal processing prices. Increased high-temperature and rainy weather in south China affected the construction of some real estate and infrastructure projects. Coupled with the adequate supply of building materials such as steel and cement, prices in the ferrous metal smelting and rolling processing industry and the non-metallic mineral products industry both fell by 1.0%. Collectively, these four industries contributed to approximately 0.18 percentage points of the MoM decline in PPI.

In May 2025, the Producer Price Index for industrial producers fell by 3.3% YoY.

In May 2025, the Producer Price Index for industrial producers nationwide fell by 3.3% YoY and 0.4% MoM, while the purchasing price index for industrial producers fell by 3.6% YoY and 0.6% MoM. On average from January to May, both the ex-factory prices and purchasing prices for industrial producers fell by 2.6% compared to the same period last year.

I. Year-on-Year Changes in Producer Prices for Industrial Products

In May, among the ex-factory prices for industrial producers, the price of means of production fell by 4.0%, contributing to a decline of approximately 2.98 percentage points in the overall level of ex-factory prices for industrial producers. Specifically, prices in the mining industry fell by 11.9%, prices in the raw material industry fell by 5.4%, and prices in the processing industry fell by 2.8%. The price of means of subsistence fell by 1.4%, contributing to a decline of approximately 0.36 percentage points in the overall level of ex-factory prices for industrial producers. Specifically, food prices fell by 1.4%, clothing prices remained flat, general daily necessities prices rose by 0.6%, and durable consumer goods prices fell by 3.3%.

Among the purchasing prices for industrial producers, prices in the fuel and power category fell by 9.8%, prices in the ferrous metal materials category fell by 7.3%, prices in the chemical raw materials category fell by 5.4%, prices in the agricultural and sideline products category fell by 2.6%, prices in the textile raw materials category fell by 2.5%, and prices in the building materials and non-metals category fell by 1.1%. Prices in the non-ferrous metal materials and wire category rose by 4.6%.

II. Month-on-Month Changes in Industrial Producer Prices

In May, among the ex-factory prices of industrial producers, the prices of means of production decreased by 0.6%, contributing to a decline of approximately 0.44 percentage points in the overall ex-factory price level of industrial producers. Specifically, prices in the mining industry decreased by 2.5%, prices in the raw material industry decreased by 0.9%, and prices in the processing industry decreased by 0.3%. Prices of consumer goods remained flat. Among them, food prices decreased by 0.1%, clothing prices increased by 0.2%, and prices of general daily necessities and durable consumer goods both increased by 0.1%.

Among the purchase prices of industrial producers, prices of fuels and power decreased by 2.1%, prices of chemical raw materials decreased by 1.2%, prices of ferrous metal materials decreased by 0.6%, prices of textile raw materials decreased by 0.4%, prices of building materials and non-metals decreased by 0.2%, and prices of non-ferrous metal materials and wires decreased by 0.1%; prices of agricultural and sideline products remained flat.

CPI Slightly Declined in May 2025, While Core CPI Increased on a YoY Basis

—Interpretation of CPI and PPI Data for May 2025 by Dong Lijuan, Chief Statistician of the Urban Department, National Bureau of Statistics (NBS)

In May, the Consumer Price Index (CPI) decreased by 0.2% MoM and 0.1% YoY. Excluding food and energy prices, core CPI increased by 0.6% YoY, with the growth rate expanding by 0.1 percentage points from the previous month. The Producer Price Index (PPI) for industrial producers decreased by 0.4% MoM, with the decline remaining the same as the previous month, and decreased by 3.3% YoY, with the decline expanding by 0.6 percentage points from the previous month. China is boosting consumption with greater intensity and more precise measures, fostering the growth of new quality productive forces, improving the supply-demand relationship in some areas, and prices are showing positive changes.

I. CPI Slightly Declined, While Core CPI Increased on a YoY Basis

The shift from an increase to a decrease in CPI on a MoM basis was mainly influenced by the decline in energy prices. Energy prices decreased by 1.7% MoM, contributing to a decline of approximately 0.13 percentage points in CPI on a MoM basis, accounting for nearly 70% of the total decline in CPI. Among them, gasoline prices decreased by 3.8%, with the decline expanding by 1.8 percentage points from the previous month. Food prices decreased by 0.2%, with the decline being 1.1 percentage points less than the seasonal level, contributing to a decline of approximately 0.04 percentage points in CPI on a MoM basis. Among them, the market supply of seasonal vegetables increased, and fresh vegetable prices decreased by 5.9%; prices of eggs, pork, and poultry meat slightly decreased, with declines ranging from 0.3% to 1.0%; affected by factors such as heavy rainfall in some areas and the summer fishing moratorium, the supply of fresh fruits, freshwater fish, and marine fish decreased, and prices increased by 3.3%, 3.1%, and 1.5%, respectively. Consumer demand continued to recover, coupled with the impact of holidays and cultural, sports, and entertainment activities held across the country. As a result, hotel accommodation and tourism prices rose by 4.6% and 0.8%, respectively, both exceeding seasonal levels. The increase in hotel accommodation prices reached a new high for the same period in the past decade. With the arrival of the summer season and the launch of new summer clothing collections, clothing prices rose by 0.6%.

The CPI declined slightly YoY, with the decline remaining the same as the previous month. Among them, energy prices fell by 6.1% YoY, with the decline widening by 1.3 percentage points from the previous month, contributing to a decrease of approximately 0.47 percentage points in the CPI YoY, which was the main factor behind the CPI's YoY decline. Policies aimed at boosting consumption continued to show positive effects, with prices in some areas showing positive changes. Core CPI rose by 0.6% YoY, with the increase widening by 0.1 percentage point from the previous month. Among them, industrial consumer goods prices excluding energy rose by 0.6%, with the increase widening by 0.2 percentage point from the previous month. Prices of gold jewelry, home textiles, and cultural and recreational durable consumer goods rose by 40.1%, 1.9%, and 1.8%, respectively, with all increases widening. Prices of gasoline-powered passenger cars and new energy passenger cars fell by 4.2% and 2.8%, respectively, with the declines narrowing. Service prices rose by 0.5%, with the increase widening by 0.2 percentage point from the previous month. Among services, rental fees for transportation vehicles, airfares, and tourism prices all turned from decline to increase, rising by 3.6%, 1.2%, and 0.9%, respectively.

II. PPI Remained Low, with Prices in Some Sectors Showing Marginal Improvement

 The main reasons for the MoM decline in PPI this month are as follows: First, international imported factors influenced the decline in domestic prices of related industries. The decline in international crude oil prices affected the decline in domestic prices of petroleum-related industries, with prices in the oil and natural gas extraction industry falling by 5.6%, prices in the refined petroleum product manufacturing industry falling by 3.5%, and prices in the chemical raw materials and chemical products manufacturing industry falling by 1.2%. These three industries collectively contributed to a decrease of approximately 0.23 percentage points in PPI MoM, accounting for more than half of the total decline. Second, domestic prices of some energy and raw materials declined on a temporary basis. Coal demand was in the off-season, with sufficient coal reserves at power plants and ports. Additionally, the low cost and strong substitution effect of new energy power generation led to a 3.0% decline in prices in the coal mining and washing industry and a 1.1% decline in coal processing prices. Increased high-temperature and rainy weather in south China affected the construction of some real estate and infrastructure projects. Coupled with sufficient supply in the production of building materials such as steel and cement, prices in the ferrous metal smelting and rolling processing industry and the non-metallic mineral products industry both fell by 1.0%. These four industries collectively contributed to a decrease of approximately 0.18 percentage points in PPI MoM.

 Coupled with factors such as a higher comparison base in the same period last year, the YoY decline in PPI widened by 0.6 percentage points from the previous month. However, from the perspective of marginal changes, China has intensified the implementation of macro policies, leading to improvements in the supply-demand relationship in some industries and a positive trend in prices in certain sectors. First, the continuous growth of new consumption momentum has driven a YoY rebound in prices of consumer goods. The continuous effectiveness of policies aimed at boosting consumption has led to the release of demand for some consumer goods, driving a rebound in prices in related industries. The MoM decline in consumer goods prices turned to flatness from a 0.2% decrease in the previous month. Among them, prices for clothing, general daily necessities, and durable consumer goods rose by 0.2%, 0.1%, and 0.1%, respectively, driving the YoY decline in consumer goods prices to narrow by 0.2 percentage points compared to the previous month. From an industry perspective, prices for arts and crafts and ceremonial goods manufacturing rose by 12.8% YoY, footwear manufacturing prices increased by 0.8%, and computer whole machine manufacturing prices rose by 0.2%. The YoY declines in prices for household washing machines, television manufacturing, and automobile whole vehicle manufacturing narrowed by 1.6, 1.4, and 0.6 percentage points, respectively, compared to the previous month. Second, the development of industries such as high-end equipment manufacturing has driven a YoY increase in prices in related sectors. The steady progress in the high-end, intelligent, and green transformation of industrial development, along with the expansion of demand for high-tech products, has led to a YoY increase in prices in related industries. Prices for integrated circuit packaging and testing series, as well as aircraft manufacturing, both rose by 3.6%. Prices for wearable smart device manufacturing increased by 3.0%, microwave communication equipment prices rose by 2.1%, server prices increased by 0.8%, and prices for semiconductor device manufacturing equipment rose by 0.7%. In addition, the supply-demand relationship in new energy industries such as PV and lithium batteries has improved, with narrower YoY declines in prices. Prices for PV equipment and components manufacturing, as well as lithium-ion battery manufacturing, fell by 12.1% and 5.0%, respectively, with declines narrowing by 0.4 and 0.3 percentage points, respectively, compared to the previous month.

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