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Manufacturing hits this year's highest level

By Xinhua | China Daily | Updated: 2014-06-02 07:12

PMI increases in May for third consecutive month, indicating a stabilizing economy

Growth in China's manufacturing sector continued to accelerate in May, rising to the highest level this year and adding to signs of a stabilizing economy, data released on Sunday indicate.

The Purchasing Managers Index, a gauge of manufacturing activity, rose to 50.8 in May, from 50.4 in April, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

The monthly reading, continuing to inch above the 50-point level, indicated that the manufacturing sector and the economy as a whole are picking up.

This is the third consecutive monthly uptick in the index, seen as one of the key indicators of economic performance, following three months of decline that ended in March.

Zhang Liqun, a researcher at the Development Research Center of the State Council, said the improving data are a sign that "the economy continued to stabilize, and this trend is becoming evident".

Eight of the 12 PMI sub-indices registered growth. The production sub-index edged up by 0.3 to 52.8 after dipping by 0.2 in the previous month.

New orders, which analysts see as the most important sub-index, jumped by 1.1 to 52.3 in May, after gaining 0.6 in April.

Export orders, which slumped by 1.1 in April, reversed the declining trend to rise by 0.2 to 49.3.

The employment sub-index dipped to 48.2 from April's 48.3, pointing to contraction in the job market.

The data came as a boon to the world's second-largest economy, which had seemed to be losing steam in the past few months.

China's economy grew at its weakest pace in 18 months in the first quarter, expanding by 7.4 percent, lower than the 7.5-percent target the central government set earlier this year.

Cai Jin, deputy head of the China Federation of Logistics and Purchasing, said that the continuously rising PMI reflects positive economic changes.

Cai pointed to the remarkable improvement in the sub-index for new orders, reflecting increasing market demand, a firm foundation for steady growth.

The official reading is also broadly in line with the HSBC/Markit PMI figure, released in late May, which rebounded sharply to 49.7 in May, hitting a five-month high.

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