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China’s factory activity growth hits 2-year high in May, Caixin PMI shows, amid strong production and new orders
- Caixin/S&P Global manufacturing purchasing managers’ index rose to 51.7 in May, up from 51.4 in April, in contrast with the official survey released on Friday
- Caixin survey is believed to be skewed more towards smaller, export-oriented firms than the much broader official gauge, which showed a surprise fall last month
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China’s factory activity grew at the fastest pace in about two years in May due to production gains and new orders, particularly at smaller firms, a private sector survey showed on Monday, lifting the outlook for the second quarter.
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The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 51.7 in May from 51.4 the previous month, the highest since June 2022, and beating analysts’ forecasts of 51.5. The 50-point mark separates growth from contraction.
China, to counter soft domestic demand and a years-long property crisis, has boosted infrastructure investment and ploughed funds into hi-tech manufacturing to bolster the broader economy this year.
However, the full effects of its industrial policy support have yet to be felt by businesses and workers.
The upbeat Caixin PMI contrasted with an official PMI survey on Friday that showed a surprise fall in manufacturing activity.
The key question is whether China’s exports will continue to hold up well in the coming months
The divergent indicators, combined with other mixed data, suggested the economic recovery is struggling to sustain momentum in the second quarter.
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