The Purchasing Managers’ Index (PMI) – a key gauge of manufacturing activity – edged up to 49.6, officials said, from 47.4 in April, which was the worst reading since the beginning of 2020.
However, the reading remained stuck below the 50 point mark separating growth from contraction.
The figures come as Beijing’s zero-Covid policy of eradicating infections with lockdowns and mass testing is challenged by a rise in the fast-spreading Omicron variant.
Dozens of cities, including economic powerhouses Shanghai and Shenzhen, have gone into full or partial lockdown in recent months, sparking warnings about the growth gouge caused by zero-Covid.
“The recent epidemic situation and changes in the international situation” have affected economic activity, National Bureau of Statistics (NBS) statistician Zhao Qinghe said in a statement.
But production of synthetic fibers, rubber and plastic products rebounded in May, along with automobile production, the statement said.
Zhao noted that commodity price indices were lower than the previous month.
While factory output and demand have improved, “the recovery momentum still needs to be strengthened,” Zhao added.
China is the last major economy welded to a policy of mass testing and hard lockdowns to weed out virus clusters, but the tight restrictions have hurt businesses.
Covid cases have tended to drop in recent weeks and local governments have gradually allowed some businesses to resume operations.
The official non-manufacturing PMI rose to 47.8 from 41.9 in April, as retail trade and transportation rebounded.
Financial hub Shanghai said it would lift most restrictions on June 1 after two months of lockdown, while Beijing eased some restrictions.
The government last week said it would offer tax relief and a bond drive to help industries, as President Xi Jinping called for a “total” infrastructure boost.
Measures to support the economy also include increasing government procurement from small businesses as well as delaying some deadlines for social security payments by employers, according to details released on Tuesday.
But analysts have warned that growth will remain weak until China eases its tough virus controls.
Moody’s on Monday lowered its annual growth forecast for the world’s second largest economy from 5.2% to 4.5%.
“The recovery is expected to remain tepid amid weak external demand and tight labor markets,” Capital Economics economist Sheana Yue said in a note on Tuesday, adding that “there continue to be signs supply chain disruptions.