China’s manufacturing and services sectors grew at a faster than expected pace in May, mitigating fears of a slowdown in the world’s second largest economy.
Robust construction and infrastructure investment led to a rise in the Purchasing Managers’ Index (PMI) figure for May, rising to 51.2. This was unchanged from April’s figure and higher than analysts predictions of 51.0.
On the whole, “China’s economy is changing into a trend of stabilization from a momentary spike and drop,” Zhang Liqun, an analyst with the China Logisticas Information Centre, said in a statement.
China’s steel industry benefitted from a higher new orders during the month, a separate industry survey showed, suggesting still-solid demand in construction.
Growth in the services sector grew to 54.5, with with exports growing by 0.1 percentage point to 50.7. Production stayed well within expansionary territory, though growth eased to 53.4 compared to last month’s 53.8.
The figures come amidst fears of a slowdown in the world’s second largest economy, after rating agency Moody’s downgraded its credit rating. Moody’s now expects 2017 growth for China at 6.6 percent, in line with the official target of at least 6.5 percent.
The ratings agency recently said that the main risks to the economy, including protectionism and Britain’s exit from the European Union, have subsided, but risks to the overall growth of China and the US remain strong.