China’s Caixin manufacturing PMI ticks up in May

Growth in China’s manufacturing sector nudged higher in May, according to figures released on Tuesday.

Caixin’s purchasing managers’ index ticked up to 52.0 from 51.9 in April, in line with consensus expectations.

Wang Zhe, senior economist at Caixin Insight Group, said manufacturers remained confident about the business outlook as the gauge for future output expectations was higher than the long-term average. "Inflation was still a crucial concern as prices continued rising," Zhe added.

Freya Beamish, chief Asia economist at Pantheon Macroeconomics, said: "We had hoped for another boost from US stimulus, but the details reveal that logistical problems got in the way.

"The new work subindex implied the strongest increase in five months. But suppliers’ delivery times lengthened, and the input price index jumped to its highest since December 2016.

"Panellists reported material shortages, with price rises impinging on production. In turn, the report suggests that output prices increased at the fastest pace since February 2011, in keeping with our call for a strong pick-up in PPI inflation in May.

"Some of these logistical problems will take a while to work through, but it looks like the PMI remains supported by demand, for now."