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 Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 51.7 in May, up from 51.4 in April. Photo: AFP

Published: 9:58am, 3 Jun 2024Updated: 3:12pm, 3 Jun 2024

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.

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.