China’s non-manufacturing activity maintained expansion in May, with the purchasing managers’ index (PMI) for the sector coming in at 54.5, the National Bureau of Statistics (NBS) said Wednesday.
A reading above 50 indicates expansion, while a reading below 50 reflects contraction.
China’s non-manufacturing PMI has remained above 54 this year, indicating a sustained recovery. Senior NBS statistician Zhao Qinghe said the service sector was the main driver of growth, with its sub-index coming in at 53.8. The construction sector also maintained brisk growth, with its sub-index standing at 58.2.
The May Day holiday helped to boost activity in the service sector, with the sub-indexes for transport, accommodation and catering all standing well above 55. Zhao said there was strong optimism among construction enterprises, as evidenced by the sub-index measuring expectations for activities in the sector coming in at 62.1.
Wednesday’s data also showed that the PMI for China’s manufacturing sector came in at 48.8 in May, down from 49.2 in April. Zhao said the decline in the manufacturing PMI was due to a number of factors, including the ongoing trade war with the United States and rising raw material prices. However, he said the overall trend of economic recovery remained intact.
Analysis
The continued expansion of China’s non-manufacturing sector is a positive sign for the overall economy. The service sector is a major driver of growth in China, and its continued strength suggests that the economy is still on track to achieve its growth target of 6.5% this year. The construction sector is also doing well, which is a sign that investment is still growing.
The decline in the manufacturing PMI is a bit of a concern, but it is not necessarily a sign of trouble. The trade war with the United States has had a negative impact on some manufacturing sectors, but other sectors have been able to offset those losses. Overall, the economy is still growing at a healthy pace, and the continued expansion of the non-manufacturing sector is a positive sign.
