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<Econ>CN May RatingDog Mfg PMI Falls to 51.8, Still Beats Forecast; Inflationary Pressure Eases
As a composite indicator summarizing overall operating conditions in the manufacturing sector in China with a single figure, China's seasonally adjusted RatingDog Manufacturing...
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<Econ>CN May RatingDog Mfg PMI Falls to 51.8, Still Beats Forecast; Inflationary Pressure Eases
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As a composite indicator summarizing overall operating conditions in the manufacturing sector in China with a single figure, China's seasonally adjusted RatingDog Manufacturing Purchasing Managers' Index (PMI) registered 51.8 in May. Although lower than April's 52.2, it remained above the 50 boom-or-bust line for the sixth consecutive month and beat market expectations of 51.3.

The latest reading showed that the pace of improvement in manufacturing conditions eased MoM, but the index still stood notably above the post-2004 long-term average of 50.8. During the latest survey period, all sub-indices except employment made positive contributions to the headline PMI, with the contribution from inventories of purchases increasing compared with April.

During the period, demand for Chinese manufactured goods continued to expand. Although the growth rate slowed from April, it remained at the highest level seen in the past five years. Surveyed companies reported that new orders increased due to stronger market demand, product improvements, acquisition of new clients and promotional activities. Despite a slight decline in new export business in May, overall growth in new orders continued to exceed the long-term average.

Another key finding from the latest survey was alleviating inflationary pressure in the manufacturing sector. On a seasonally adjusted basis, both the input prices and output prices sub-indices declined MoM for the first time in six and seven months, respectively, indicating a moderation in inflation. Nevertheless, the rate of increase in input costs remained above the long-term average. Manufacturers cited higher raw material and energy costs, supply chain disruptions and international conflicts as contributing factors.

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