China's Caixin manufacturing PMI steadies at 50.2 in May, Aussie hits 3-week tops
|China's May Caixin manufacturing PMI came in at 50.2 vs. 50.0 expected and 50.2 last, as operating conditions improved for the first time in four months.
On Friday, the purchasing managers' index (PMI) for China's manufacturing sector arrived at 49.4 in May, down from 50.1 in April, the National Bureau of Statistics (NBS) reported.
Summary
“Chinese manufacturing firms signalled a further slight improvement in overall operating conditions during May. Total new work rose at a faster pace, supported by a renewed increase in export sales, while production was broadly stable. As a result, backlogs of work continued to expand, though firms retained a relatively cautious approach to staffing levels. Inflationary pressures remained subdued, with input costs rising only slightly while output charges were unchanged from the previous month. However, business confidence regarding the year ahead softened midway through the second quarter.”
“Underpinning the positive PMI figure was a further increase in total new orders placed with Chinese goods producers. The rate of new business growth quickened slightly since April, supported by a renewed increase in new export sales. According to panellists, new product releases and firmer foreign demand supported the expansion. Production at Chinese manufacturers was meanwhile stable in May, following a slight increase in the previous month.”
Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:
“The Caixin China General Manufacturing Purchasing Managers’ Index was 50.2 in May, unchanged from the previous month, indicating a mild expansion in the manufacturing sector.
1) The subindex for new orders edged higher, and the gauge for new export orders moved back above 50 to the same level as in January, which was the best reading since March 2018. The improvements in both indices signals stable domestic and overseas demand.
2) The output subindex declined for the second straight month, although it remained marginally in expansionary territory. Employment conditions have broadly stabilized, with the employment subindex showing only a marginal drop in staff numbers.”
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