By Gina Lee
Investing.com – China’s official manufacturing Purchasing Manager’s Index (PMI) indicated that manufacturing activity continued its expansion in May, with the National Statistics Bureau announcing a figure of 50.6 on Sunday.
PMI figures above 50 indicate an expansion.
But May’s figure came in below April’s 50.8 level, as well as below the 51-level predicted by analysts in forecasts prepared by Investing.com.
Non-manufacturing PMI was 53.6, compared to the previous month’s reading of 53.2.
Meanwhile, figures from the private Caixin/Markit survey corroborated the expansion but indicated that the economy returned to expansion in May instead of April.
The Caixin/Markit manufacturing PMI was 50.7 for May, higher than the forecasted 49.6 as well as the previous month’s 49.4.
The Caixin/Markit survey features a bigger mix of small-and-medium enterprises compared to the state-owned enterprises and big businesses polled by the official PMI survey, corroborated the expansion
The data also indicated that the rate of expansion for output at its fastest since January 2011, with production recovering faster than demand as total new work fell in May.
The world's second largest economy is still recovering from the economic impact of the COVID-19 virus. Rising tensions with the U.S. over issues ranging from national security laws for Hong Kong and Macau, COVID-19's origins and Taiwan are also impacting the recovery.
“May data signaled a further increase in output following February’s record decline, with firms widely mentioning the resumption of works due to an easing of COVID-19 related measures. Data indicated that the fall was largely driven by weaker external demand, as many nations faced strict measures to stop the spread of the pandemic including company closures, leading new export orders to contract at a historically sharp rate,” Caixin and IHS Markit said in a joint statement.