China economy: manufacturing growth picked up in May, but inflation pressures builds
- The Caixin/Markit manufacturing purchasing managers’ index (PMI) rose to 52.0 last month, the highest level since December and inching up from April’s 51.9
- Analysts polled by Reuters had expected the index to remain at 51.9. The 50-mark separates growth from contraction on a monthly basis
China’s factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, though sharp rises in raw material prices and strains in supply chains crimped some companies’ production, a business survey showed on Tuesday.
Analysts polled by Reuters had expected the index to remain at 51.9. The 50-mark separates growth from contraction on a monthly basis.
New orders rose at the strongest pace so far this year and a gauge for export orders was the highest since November, but the output reading, while still solid, was slightly lower than the previous month.
Rapidly rising commodity prices began to disrupt the economy as some enterprises began to hoard goods, while some others suffered raw material shortages. Supply chains were also significantly affected
“Rapidly rising commodity prices began to disrupt the economy as some enterprises began to hoard goods, while some others suffered raw material shortages. Supply chains were also significantly affected,” Wang Zhe, senior economist at Caixin Insight Group, said.
A subindex for input costs expanded at the fastest pace since 2016.
