China PMIs fuel hope economy is stabilizing, property still a wild card
BEIJING (Reuters) - China's factory and services sectors had their best showings in months in May as demand rebounded, surveys showed, fuelling optimism that its economy may be steadying after a weak start to the year.
"Exports are picking up and the impact of the 'mini stimulus' is gradually being felt," said Tao Wang, an economist at UBS, referring to recent government measures to revive growth.
"We expect this to last in the second and third quarters."
The final HSBC/Markit purchasing managers' index (PMI) rose to 49.4 in May, a four-month high and compared to April's 48.1.
Though the final reading was still under the 50-point level that separates growth in activity from contraction, the improvement nonetheless stirred hopes that the economy is working its way through its prolonged soft patch.
The buoyancy was mirrored by a similar acceleration in growth in the services sector, where a government-released PMI climbed to a six-month high of 55.5, from April's 54.8.
The survey results augur well for China's monthly economic data that will be released from June 8, and gave a fillip to Asian stock markets.
China's economy has had a bumpy ride this year as an under whelming run of data showed an extensive cooldown in investment, retail sales and factory output, feeding concerns that growth could fall further from an 18-month low seen between January and March.
Worried that a broadening downturn would cause unemployment to spike and threaten China's social stability, the government is trying to bolster growth by pump-priming the economy. Continued...