PMI signals divergent sector performance

Editor's note: China's composite purchasing managers' index stood at 50.5 in May, up 0.4 points from the previous month and above the 50 expansion threshold, showing an overall increase in business activity, according to data released by the National Bureau of Statistics on Sunday. Xinhua News Agency spoke to Huo Lihui, chief statistician at the National Bureau of Statistics, and Wen Tao and Wu Wei, both analysts at the China Logistics Information Center, to interpret the data. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The manufacturing PMI stood at 50, down 0.3 points from April, while the nonmanufacturing PMI came in at 50.1, up 0.7 points month-on-month, back into expansion territory, demonstrating divergence among different sectors.

The PMI for high-tech manufacturing and equipment manufacturing stood at 52.9 and 52.1, respectively, up 0.7 and 0.3 points from the previous month, demonstrating the leading role of new growth drivers. While the PMI for service sectors such as railway transportation, insurance, telecommunications, broadcasting, television and satellite transmission was above 55, indicating a major upswing driven by consumption during the May Day holiday from May 1 to May 5.

The manufacturing PMI dipped in May due to the pullback of previously strong external demand. Even so, the manufacturing sector operated steadily on the whole. Positive changes were seen in production activities, market prices and industrial structure, driving the economy toward high-quality and innovative development.

The business activity index of the construction industry was 48.8 in May, rising 0.8 points from the previous month, and sustained demand for urban renewal and the development of water networks, new-type power grids, computing power networks, next-generation communication networks, urban underground pipeline networks and logistics networks are expected to continue fueling infrastructure investment, thus stabilizing economic growth. The business activity expectation index of the civil engineering sector rose by more than 4 points month-on-month to over 55, hitting a new high for the year.

As policies for infrastructure construction keep delivering results and major projects are accelerated, the overall demand in the civil engineering sector is expected to gain solid momentum.

On the whole, the nonmanufacturing sector saw greater vitality in May than in April, with consumption and investment maintaining stable performance.