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Converging PMI data reflect divergence in manufacturing growth in China
(MENAFN) China's manufacturing sector experienced its fastest growth in nearly two years in May, according to a private survey, which stands in stark contrast to weak official data that has dampened the country's growth outlook. The Caixin Manufacturing Purchasing Managers' Index (PMI) rose to 51.7 in May, up from 51.4 in April and slightly surpassing the average forecast of 51.6 anticipated by experts. This marks the highest reading since June 2022, with any reading above 50 signaling expansion in the sector, while a figure below 50 indicates contraction.
The positive results from the private Caixin survey contrast sharply with the official manufacturing PMI released on Friday, which unexpectedly showed a decline in factory activity for the same period. These two surveys differ in their methodologies, including the sample sizes, geographic coverage, and types of firms they assess. The Caixin survey tends to focus on smaller, more export-oriented enterprises, providing a different perspective on the manufacturing landscape compared to the broader official survey.
Following the release of the Caixin survey, China's main Shanghai Shenzhen CSI 300 index, which measures the performance of the 300 largest companies listed on Chinese stock exchanges, managed to recover its earlier losses, climbing by as much as 0.6 percent. This improvement in investor sentiment was bolstered by additional positive data on home and car sales. Meanwhile, Chinese stocks traded in Hong Kong surged by as much as 3.1 percent after experiencing declines over the previous four sessions, further reflecting the market's optimistic response to the upbeat private survey results.
The positive results from the private Caixin survey contrast sharply with the official manufacturing PMI released on Friday, which unexpectedly showed a decline in factory activity for the same period. These two surveys differ in their methodologies, including the sample sizes, geographic coverage, and types of firms they assess. The Caixin survey tends to focus on smaller, more export-oriented enterprises, providing a different perspective on the manufacturing landscape compared to the broader official survey.
Following the release of the Caixin survey, China's main Shanghai Shenzhen CSI 300 index, which measures the performance of the 300 largest companies listed on Chinese stock exchanges, managed to recover its earlier losses, climbing by as much as 0.6 percent. This improvement in investor sentiment was bolstered by additional positive data on home and car sales. Meanwhile, Chinese stocks traded in Hong Kong surged by as much as 3.1 percent after experiencing declines over the previous four sessions, further reflecting the market's optimistic response to the upbeat private survey results.
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