China's May factory activity expands for third straight month

BEIJING: China's factory activity rose for a third straight month in May as companies got back to business after strict measures to contain the coronavirus, but worldwide lockdowns and weak demand are likely to weigh on the economy's recovery.

The official manufacturing Purchasing Manager's Index (PMI) eased to 50.6 in May from 50.8 in April but remained above the 50-point mark that separates growth from contraction on a monthly basis. Analysts had expected it to pick up to 51.0.

China's economy shrank 6.8pc in the March quarter from a year earlier as the outbreak and tough containment measures paralysed activity, the first contraction since quarterly records began.

While much of the economy has now reopened, many manufacturers are struggling with reduced or cancelled overseas orders as global demand falters.

Domestic demand also remains depressed amid increased job losses and worries about a second wave of infections.