(NBS) China’s purchasing managers’ index, gauging manufacturing activity, was recorded at 49.6 in May, signaling a contraction for another month. The contraction was better than the feared index of 48.0%.
The slight improvement in manufacturing in May was attributed to the continuing easing of restrictions, which boosted constrained factory activity.
Other parameters remained in the contraction zone, although the rate of activity improved from April. The gauge of construction and services sectors hit 47.8 from 41.9 in April, surpassing estimates of 45.5.
The better than feared factory data is now adding optimism to an economy struggling to escape the Covid slump. Economists expect the Chinese economy to grow by 4.5% this year, which is below the government’s target of 5.5%.
NBS senior statistician Zhao Qinghe lauded the recoveries in manufacturing, although he warned that the momentum should be sustained. Iris Pang, chief economist for Greater China at ING Bank NV, says the recovery will be determined by whether China will lock down its cities again in the future.
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