Investing.com-- China’s manufacturing sector grew more than expected in May, private purchasing managers' index data showed on Monday, indicating that some sectors of the country’s biggest economic drivers still had legs.
The Caixin manufacturing PMI read 51.7 for May, more than expectations of 51.6 and higher than the 51.4 seen in the prior month.
The reading largely contrasted with an official PMI reading from Friday, which showed that China’s manufacturing unexpectedly shrank in May. But the Caixin PMI differs from the official PMI, where the Caixin survey covers smaller, private businesses in southern China, while the official survey focuses more on larger, state-run businesses in the north.
The Caixin PMI also covers a smaller pool of Chinese businesses than the official reading. Investors usually use both surveys to get a broader picture of the Chinese economy.
Still, Monday’s reading indicates that some sectors of China’s massive manufacturing sector were seeing sustained strength, with the Caixin PMI signaling growth for a seventh consecutive month.
But the survey showed that while demand, output and new orders improved, manufacturing prices remained sluggish while employment continued to shrink. This indicated that the headwinds faced by the sector over the past three years still remained in play.
Beijing rolled out a string of stimulus measures so far in 2024 to help spruce up growth. But their effects are yet to be seen in an broader Chinese economic recovery, with weak inflation, sluggish consumer spending and a sustained property market meltdown all remaining in play.