China’s factories appear to be on the mend this month, according to an early gauge of activity in the country’s all-important manufacturing sector.
HSBC said its “flash” measure of sentiment among manufacturing purchasing managers was 49.7 in May. The rebound from the index’s final reading of 48.1 in April was sharper than analysts had expected.
While the index showed improvement, any number under 50 still indicates a deceleration in the manufacturing sector.
Still, economists said advances in new orders and output prices were positive developments that suggest factories are now on firmer footing.
“Today’s PMI reading suggests that downwards pressure on the manufacturing sector has eased markedly,” said Julian Evans-Pritchard of Capital Economics. “While downwards pressure on the economy remains we aren’t seeing as rapid a slowdown this quarter as last.”
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