Manufacturing continues to expand in May

Chinese manufacturing activity continued to expand in May, Bloomberg reported. The Purchasing Manager’s Index (PMI), produced by the the China Federation of Logistics and Purchasing, came in at 53.1 in May, compared to 53.5 in April. A figure in excess of 50 indicates an expansion. A similar index released by brokerage CLSA was also positive, the PMI standing at 51.2 in May compared to 50.1 in April. This marks the third straight month of growth for the manufacturing sector.  “Economic activities and domestic demand are expanding as more stimulus projects break ground,” said Lu Ting, an economist at Merrill Lynch in Hong Kong. “China’s recovery may get a further lift as neighboring economies climb out of the slump.” CLSA attributed the growth to domestic demand, as foreign demand for Chinese manufactured goods continued to decline. The report also noted that workforce numbers remained flat from last month, and that manufacturers reduced prices in May for the ninth consecutive month – although the rate of reduction has eased over the last two months.