China’s May manufacturing gauge exceeds estimates as growth extends first-quarter momentum

China’s official factory gauge held up and exceeded estimates, adding to signs the world’s second-largest economy has maintained some of its first-quarter momentum.

The manufacturing purchasing managers index remained at 51.2 for a second straight month in May, compared with a median estimate of 51 in a Bloomberg survey of economists.

The non-manufacturing PMI rose to 54.5 after matching a six-month low of 54 a month earlier. Numbers higher than 50 indicate improving conditions.

Continuing momentum gives policy makers room to rein in increased leverage and financial risks. Analysts last month upgraded forecasts for China’s economic growth this year after an unexpected pick-up to 6.9 per cent in the first quarter, according to a Bloomberg survey.