Investing.com-- Chinese manufacturing activity unexpectedly contracted in May, purchasing managers index data showed on Friday, as an initial boost from bumper stimulus measures by Beijing now appeared to be running out of steam.
Manufacturing PMI read 49.50 in May, data from the National Bureau of Statistics showed. The reading was weaker than expectations of 50.5, and contracted from the 50.4 seen in April.
A reading below 50 indicates contraction, with the manufacturing PMI now shrinking after two months on expansion.
Friday’s data showed that manufacturing activity- which is a key driver of the world’s second-largest economy- was slowing down despite continued stimulus measures from Beijing. The sector was battered by middling overseas demand and sluggish local consumption, and had also contracted for most of 2023.
But PMI data on Friday showed weakness in Chinese business activity extended beyond the manufacturing sector.
China’s non-manufacturing PMI rose 51.1 in May, weaker than expectations of 51.5, and April’s reading of 51.2.
This saw overall business activity grow at a slower pace in May, with the Chinese composite PMI at 51.0, down from 51.7 in the prior month. The composite PMI was back at its weakest level since February, after advancing somewhat over the past two months.
The reading indicated that Beijing’s recent bout of stimulus measures provided limited support to the Chinese economy, and that the government likely needed to do more to shore up activity.