China's manufacturing PMI up in May

BEIJING - China's manufacturing sector grew at the fastest pace in eight months in May.

The purchasing managers' index (PMI) for China's manufacturing sector came in at 51.9 in May, up from 51.4 in April, the National Bureau of Statistics (NBS) said Thursday.

A reading above 50 indicates expansion, while a reading below reflects contraction.

The May figure was also higher than the 51.2 for the same period last year, and the highest since October last year, according to the NBS website.

"The manufacturing sector expanded at a faster pace, with growth momentum further strengthened," said NBS senior statistician Zhao Qinghe.

China's official manufacturing PMI in May was well above forecasts, given Japanese securities brokerage Nomura said it had expected official PMI to come in at 51.5 in May, above the consensus of 51.4.

Nomura said the rebound in May was mainly driven by the "factory output" sub-index, especially by ferrous metal processing.

Both production and demand saw steady expansion as the sub-index for production and the new order sub-index rose to 54.1 and 53.8, respectively.

"Today's data confirm our view that suppressed production over the winter and restocking in Q2 could support a rebound in the PMI and industrial production," said Nomura in its report Thursday.

Among sub-indices by enterprise size, big enterprises led the rise, said the Nomura report.

Sub-indices for the raw materials inventories and employment softened slightly to 49.6 and 49.1 respectively.

The NBS data also showed that the non-manufacturing PMI edged up from 54.8 in April to 54.9 this month, and the composite PMI output index rose from 54.1 in April to 54.6 this month.

The non-manufacturing business activity index for services rose to 54 this month, the second highest reading this year.

Consumption and related sectors including air transportation, express delivery, telecom and internet software continued strong expansion in May.

The World Bank remains optimistic about China's economy, leaving its estimate for the country's GDP growth unchanged at 6.5 percent for 2018.

"Economic activity in China remains resilient, with GDP growing by 6.9 percent in 2017 and 6.8 percent year on year in the first quarter of 2018. Consumption continues to drive growth. Growth is projected to moderate to 6.5 percent in 2018 and 6.3 percent in 2019-20," according to the World Bank's new China Economic Update released Thursday.