China Caixin Manufacturing PMI for May comes in at an unchanged 51.1 and above 50 for the 12th consecutive month
- expected 51.2, prior 51.1
- Output sub-index 51.8 in May, a three-month high
"Overall, operating conditions across the manufacturing sector remained stable. The growth in the price of industrial products has gained momentum, however, the export situation was still disappointing"
Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group:
- "The index for new export orders picked up in May, but remained in contraction territory, reflecting that the export situation was still grim"
Background to this (via Reuters):
- Caixin survey suggests China's factories have maintained solid overall growth despite the government's war on industrial pollution, a slowing housing market, and trade tensions with the United States.
- Manufacturers in May were more optimistic about future growth prospects, the Caixin survey found, though there could be uncertainty about external markets as a reading on export orders was in contraction for a second month.
- Inflation pressures are picking back up, as higher commodity prices pushed up input prices at the fastest pace in three months, the survey found, with CEBM's Zhong saying industrial products price gains can help boost manufacturers' profits.
- Manufacturers were able to raise their sales prices at the fastest pace this year, indicating stronger downstream demand was allowing factories to pass along most of their cost increases. Indeed, the spread of the input price sub-index over the output price sub-index was the lowest since October 2016. An employment sub-index showed Chinese factories continued to shed workers, as companies said they were looking to cut costs.
