Manufacturing activity in China dropped back into contraction territory in November after a brief rally in October, with demand remaining weak despite easing energy curbs, according to a private survey.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI) for November stood at 49.9 for the month, just below the 50-point threshold that separates contraction from expansion.
On Tuesday, the country’s official PMI, released by the National Bureau of Statistics, came in at 50.1. The official PMI puts greater emphasis on the activity of larger, state-run companies.
“Policymakers should still focus on supporting small and midsize enterprises,” Wang Zhe, a senior economist at Caixin Insight Group, said.
Power Shortages Ease
“They should also pay attention to problems including deteriorating employment, limited growth of household income and weak purchasing power for consumer goods.”
Figures showed that an easing of power shortages, which hit the economy in October, boosted output. Inflationary pressure also relaxed, Caixin said.
“Supply in the manufacturing sector recovered, while demand weakened,” Wang said. “Relaxing constraints on the supply side, especially the easing of the power crunch, quickened the pace of production recovery,” he added.
The increase in output was offset by a decline in new orders while factory owners cut staff, the survey showed.
- George Russell
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