China's manufacturing sector expanded faster than expected in May, although the pace of growth slowed on a monthly basis, according to a private survey of export-oriented firms.

The RatingDog China General Manufacturing Purchasing Managers' Index (PMI), which is compiled by S&P Global and released on Monday, showed that the gauge stood at 51.8 during the period, with a reading above the 50 threshold indicating expansion from contraction.

While that was down from April's reading of 52.2, it was slightly better than analysts' forecasts of 51.6 polled by Reuters and marked the sixth straight month of expansion.

“The latest reading signalled a softer improvement in manufacturing conditions than the previous month, but remained comfortably above the long-run survey trend of 50.8 since 2004,” according to S&P Global.

The RatingDog survey reading was also better than an official gauge published on Sunday, which showed factory activity stalled in May, dropping to 50 from 50.3 in April, partly affected by the five-day Golden Week holiday for Labour Day as well as the continuing stalemate in the Middle East.

Meanwhile, production rose for the sixth month in a row, according to the private poll, led by investment goods, with firms attributing the increase to stronger market demand, higher orders, product improvements and new business.

New orders increased for a 12th consecutive month, although the pace of growth slowed on a monthly basis.

But new export orders contracted for the first time in five months, an early sign that rising energy prices weighed on global demand for Chinese goods.

Separately, price pressures eased during May, with both input and output price inflation easing for the first time in six and seven months, respectively.

Input cost inflation dropped to a three-month low, with the investment goods sector recording the sharpest increase and consumer products the weakest.

Average output inflation also eased to a three-month low but remained above the long-run average.

Chinese goods producers had raised their export charges for a sixth consecutive month, albeit at a slower pace than in April.

The survey also showed that manufacturers remained optimistic about output over the coming 12 months, though confidence weakened from April and matched the average for 2026 so far.

The private poll tends to reflect activity in smaller and more export-oriented companies, while the official survey typically covers larger, state-owned firms and major industry players. (Additional reporting by Reuters)


Edited by Tony Sabine