China’s PMI at five-month high

In­dex pulled up by out­put and new or­ders while em­ploy­ment still lags be­hind

China Daily (Canada) - - BUSINESS - By ZHENG YANGPENG zhengyang­peng@ chi­

The pre­lim­i­nary Pur­chas­ing Man­agers In­dex for Chi­nese man­u­fac­tur­ing in May beat ex­pec­ta­tions with a five­month high, sug­gest­ing the world’s sec­ond-largest econ­omy is sta­bi­liz­ing.

The PMI, re­leased by HSBC Hold­ings Plc and Markit Eco­nom­ics, was 49.7, com­pared with a 48.3 me­dian es­ti­mate from an­a­lysts. April’s fi­nal read­ing was 48.1. Still, a read­ing be­low 50 re­flects con­trac­tion. A fi­nal May read­ing is ex­pected on June 3.

“Ten­ta­tive signs of sta­bi­liza­tion are emerg­ing, partly as a re­sult of the re­cent min­is­tim­u­lus mea­sures and lower bor­row­ing costs,” HSBC econ­o­mist QuHong­bin said.

Out­put and or­ders re­bounded. The new or­der sub-in­dex rose to 50.2 from 47.4 in April, the high­est read­ing so far this year. The new ex­port or­der sub-in­dex rose to 52.7, com­pared with 48.9 in April, the high­est since Novem­ber 2010. The man­u­fac­tur­ing out­put in­dex rose to a four-month high of 50.3 in May, up from 47.9 in April.

De­in­fla­tion­ary pres­sure eased. Out­put prices rose for the first time sinceNovem­ber.

“Mo­men­tum for re­cov­ery has strength­ened,” Guan Qingyou, as­sis­tant dean of Min­sheng Se­cu­ri­ties Re­search, said. He re­peated his fore­cast that eco­nomic growth for the sec­ond quar­ter may stay flat with the first quar­ter’s 7.4 per­cent.

Some data wor­ried econ­o­mists. The em­ploy­ment su­bindex shrank more quickly, ac­cord­ing to HSBC andMarkit. Qu said the jobs mea­sure “im­plies that this month’s uptick in sen­ti­ment has not yet fil­tered through to the la­bor mar­ket”.

“Downside risks to growth re­main, par­tic­u­larly as the property mar­ket continues to cool”, Qu said. “More pol­icy eas­ing is needed to put a floor un­der growth in the

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