China's manufacturing PMI shockingly jumps to 50.8

Thanks to an increase in outputs.

According to BBVA, China's official manufacturing PMI for May, released on Saturday (June 1), beat expectations by unexpectedly rising to 50.8 (BBVA: 49.9; consensus: 50.0) from 50.6 in April.

The output subcomponent increased to 53.3 from 52.6 last month, while new orders also ticked up to 51.8 from previous 51.7; at the same time, new export orders also picked up to 49.4 from 48.6 previously.

Here's more from BBVA:

The upbeat official PMI outturn stands in contrast to a much weaker final outturn from the private sector HSBC PMI, which declined to 49.2, below the 49.6 reported earlier in the flash estimate.

It is difficult to reconcile the divergence in the two PMI outturns. Setting aside issues of possible seasonality, it is likely that the official PMI is picking up improving output trends among larger, more domestically oriented firms, while the HSBC indicator is picking up weakness among smaller, more export-oriented firms, on which its sample is based.

As such, we continue to be presented with a mixed picture of growth momentum, and we await a batch of May activity indicators next week, including trade (June 8), inflation, industrial production, investment, retail sales (due out June 9), and credit aggregates (June 10-15) for a sharper picture. For now, we maintain our 8.0% growth outlook for 2013.

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