HSBC’s measure of China’s dominant manufacturing base suggested a milder dip in output, with a purchasing managers’ index (PMI) score of 49.4. Though any number below 50 suggests contraction, May was the strongest month that the bank has recorded since January.
New export orders were a particularly positive part of the index, with a reading of 53.2, the highest seen in just over four year.
The government’s own index of the country’s non-manufacturing firms also showed an improvement for business conditions last month. Its PMI reading rose to 55.5, the best in 2014 so far.
“The final PMI reading for May confirmed that the economy is stabilising, but it is too early to say that it has bottomed out, particularly in light of a weaker property sector. The lack of a sustainable growth momentum warrants stronger policy support,” said Hongbin Qu, HSBC’s chief China economist.