China - Caixin/Markit Manufacturing PMI for May in line at 52.0, 13th straight month of expansion
- highest of 2021 (so far)
expected 52.0, prior 51.9
Key findings cited in the report:
- Total new business rises solidly, supported by stronger export sales
- Production growth softens slightly due to supply chain strain
- Staffing levels broadly stable as companies face steep rise in costs
Some of what was noted in commentary to the report (bolding mine):
- supply and demand expanded, and demand was slightly stronger than supply
- subindex of total new orders hit its highest point in 2021
- gauge for new export orders was at its highest since November
- employment subindex came in just marginally above 50
- Inflationary pressure grew as prices surged. The gauge for input costs pushed deeper into expansionary territory and rose to the highest reading since December 2016. The pressure of upstream costs was transmitted downstream. The measure for output prices jumped above 60, hitting the joint-highest point since November 2010. The measure for export prices rose to the highest in three years amid rising transportation costs.
- Policymakers mentioned rising commodity prices at the State Council executive meetings on May 12 and May 19 and issued instructions about stabilizing commodity supplies and prices. Inflationary pressure would limit the room for monetary policy maneuvers. The price transmission effect emerged as manufacturing output prices surged last month. Rapidly rising commodity prices began to disrupt the economy as some enterprises began to hoard goods, while some others suffered raw material shortages. Supply chains were also significantly affected.