China's non-manufacturing PMI rises in May

China's non-manufacturing activity expanded again in May, the growth was the fastest in six months. This follows Monday's manufacturing PMI which also showed a positive picture. But today's data revealed problems remain in the property sector.

The official non-manufacturing purchasing managers' index in May grew to 55.5 from April's 54.8, well above the 50-point level that separates expansion from contraction. A rebound in new orders contributed the most to the growth, rising to 52.7 in May from 50.8 in April. The non-manufacturing PMI tracks activity in sectors like construction, software, aviation, railway transport and real estate.

"The non-manufacturing PMI in May rose to its highest reading of the year, showing that activities in the non-manufacturing sector are continuing to expand. Viewed from the trend of structural reform, the structure is escalating while the driving power of the service sector to economic growth is also improving," said Cai Jin, vice chairman of China Federation of Logistics & Purchasing.

Activity in the real estate sector stayed below the 50-point level in May, while the enterprise expectations index fell for the third straight month. Those numbers indicate a lack of confidence in real estate.

"The real estate market is still a little gloomy. In terms of prices, the real estate price index is climbing back. So generally speaking, the market is reviving," said Cai.

Other sectors such as employment, construction, aviation and the Internet all increased in May, positive signs of China's improving economic structure.