China’s Factory Activity Slipped in May, but Consumer Spending Held Up

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BEIJING—An official gauge of Chinese factory activity slipped in May on weaker export demand and higher commodity prices, while the country’s nonmanufacturing sector was bolstered by stronger construction and holiday spending.

China’s official manufacturing purchasing managers index slipped slightly to 51.0 in May from the previous month’s 51.1 reading, according to data released Monday by the National Bureau of Statistics.

The result was largely in line with the 51.1 median forecast expected by economists polled by The Wall Street Journal, and marked the 15th straight month that the gauge came in above the 50 mark that separates expansion from contraction.

A recent surge in prices for raw materials such as iron ore, crude oil and coal sent the subindex for input prices to 72.8 in May, the highest level since November 2010, while output prices notched up a record-high reading of 60.6, according to Monday’s PMI data.

The soaring raw-material costs prompted some factories that benefit from the increased prices to step up output, pushing the subindex measuring production higher.

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