OREANDA-NEWS. June 06, 2014. China's non-manufacturing activity further expanded in May, with the sector's purchasing managers' index (PMI) rising to 55.5 from 54.8 in April, official data showed.
 
The non-manufacturing PMI, compiled by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, tracks activity in sectors including construction, software, aviation, railway transport and real estate.
 
The rise marks the second straight month of improvement, following a 0.3-point rebound in April and a decline in March. In January, the index hit its lowest level in more than a year at 53.4.
 
A PMI reading above 50 indicates expansion, while a reading below 50 reflects contraction.
 
Tuesday's reading came after strengthened manufacturing data freshly released on Sunday. The latest official survey showed China's manufacturing PMI increased to 50.8 in May, hitting a five-month high and adding to signs of a stabilizing economy.
 
Wu Wei, an analyst from China Logistics Information Center, said an evident increase in the sub-index for new orders, which reflects the market demand, was a main driver for robust non-manufacturing activity in May.
 
Tuesday's data showed the index for new orders touched an eight-month high of 52.7 in May, up 1.9 point from a month earlier.
 
Wu said strengthened business activity and improved demand will boost endogenous growth momentum for the economy.
 
He noted that demand has improved both on infrastructure construction and the consumer end, with the indices for new orders in the civil construction and retail services sectors up significantly.
 
However, business activity in the real estate sector remained lackluster. The sub-index for the property sector still fell below the boom-bust line of 50, with its business outlook sub-index down for three months straight.
 
The sub-index for the tertiary sector stayed at high levels, up 1.0 point month on month to 54.4.
 
Tuesday's survey results also showed the overall index for business outlook slipped to 60.7 from 61.5 in April, but was high enough to indicate optimism among non-manufacturing enterprises about the market in the next three months.
 
The index for employment added 0.7 point from a month ago to 50.9 in May, the fourth straight month it hit above 50.