- Flash China Manufacturing PMI™ at 49.7 in May (48.1 in April). Five-month high.
- Flash China Manufacturing Output Index at 50.3 in May (47.9 in April). Four-month high.
The HSBC Flash China Manufacturing PMI rebounded sharply to 49.7 in May, up from 48.1 in April. The improvement was broad-based with both new orders and new export orders back in expansionary territory. Disinflationary pressures also eased over the month and output prices increased for the first time since November 2013.
However, the employment index fell further to 47.3, which implies that this month’s uptick in sentiment has not yet filtered through to the labour market.
Some tentative signs of stabilization are emerging, partly as a result of the recent mini-stimulus measures and lower borrowing costs. But downside risks to growth remain, particularly as the property market continues to cool. We think more policy easing is needed to put a floor under growth in the coming months.