Caixin China manufacturing PMI steady in May, surprising consensus

Activity in China's manufacturing sector was steady last month, according to the results of perhaps the most closely-followed survey of conditions in the sector.

Caixin's factory sector PMI for the month of May printed at 50.2, unchanged from the month before and ahead of the consensus forecast for a reading of 50.0.

That finding was in stark contrast with the findings of a rival survey compiled by the government.

Just three days before, the 'official' factory PMI had fallen from 50.1 to 49.4, missing the consensus forecast for a reading of 49.9 by a wide margin.

Perhaps most surprisingly, despite the ongoing trade war between the US and China, a sub-inex tracking new export orders edged higher, as did others for new orders and employment.

Hence, the biggest drag on the headline gauge was the drop in the output sub-index, which fell back from April's print of 50.7 to 50.1.

Despite the better-than-expected reading, Julian Evans-Pritchard at Capital Economics believed China's economy had yet to hit bottom and although policy support would buttress growth further down the road "[but] with the scale of stimulus likely to remain smaller than during previous downturns, we don’t anticipate a strong recovery."