BEIJING (Reuters) – China’s manufacturing activity unexpectedly fell in May, an official factory survey showed on Friday, keeping alive calls for fresh stimulus as a protracted property crisis continues to weigh on businesses, consumers and investors.

The official purchasing managers’ index (PMI) fell to 49.5 in May from 50.4 in April, below the 50-mark separating growth from contraction and missing a median forecast of 50.4 in a Reuters poll.

Solid first quarter GDP data has reduced some of the urgency to ramp up stimulus, but analysts say the jury is still out on whether recent momentum can be sustained as authorities continue efforts to stabilise the crisis-hit property sector.

The International Monetary Fund on Wednesday revised up its China growth forecast by 0.4 percentage points to 5% for 2024 and 4.5% in 2025, but warned the property sector remained a key growth risk.

Problems in the property sector have had a negative impact across broad areas of China’s economy and have slowed Beijing’s efforts to shift its growth model more towards domestic consumption from debt-fuelled investment.

Retail sales last month, for instance, grew at their slowest since December 2022 although factory output, trade and consumer prices data for April suggested the $18.6 trillion economy could be finally turning a corner.

China this month unveiled “historic” steps to stabilise the property market, but analysts say the measures fall short of what is required for a sustainable recovery.

The IMF said it saw “scope for a more comprehensive policy package to address property sector issues.”