China's manufacturing PMI shrinks further in Nov, misses expectations

  • Economic Indicators News
China's manufacturing PMI shrinks further in Nov, misses expectations
Credit: © Reuters. Chinese manufacturing activity declined further in November, as the sector saw increased headwinds from slowing overseas demand, while growth in the non-manufacturing sector also deteriorated. 

The official manufacturing purchasing managers index (PMI) read 49.4 in November, data from the National Bureau of Statistics showed. The reading was weaker than expectations of 49.6, and contracted from the prior month’s reading of 49.5.

A reading below 50 indicates contraction, with China’s manufacturing PMI now having contracted for six out of the 11 months so far in 2023. 

The manufacturing sector has been struggling with a steady decline in overseas demand for Chinese goods, which saw new orders and production levels drop drastically this year. Continued signs of economic strife in the country’s biggest export markets pointed to few changes from this trend, as U.S., Japan and euro zone economies grappled with slowing consumer spending. 

Demand for services- local and overseas- remained a bright spot for Chinese businesses, but now appeared to be tracking a slump in manufacturing activity. China’s non-manufacturing PMI grew 50.2 in November, missing expectations of 51.1 and declining from the prior month’s reading of 50.6.

The non-manufacturing PMI was at its weakest level in 2023, and was now barely in expansion territory. This saw China’s composite PMI slow to 50.4 from 50.7 in the prior month, also touching its worst level for the year. Overall Chinese business activity was now edging dangerously close to contraction territory. 

A post-COVID economic rebound has largely failed to materialize in China, with business activity levels now edging closer to lows seen during the country's three years of virus-linked lockdowns. Fears of a new pandemic also emerged recently, following a wave of pneumonia infections across the country.

While Beijing attempted to shore up domestic demand with more liquidity injections in recent months, the move offered little relief to local businesses. Chinese consumers turned more cautious over spending this year, which saw the country slip back into disinflation territory in October. 

Investors are now clamoring for more targeted, fiscal measures from Chinese authorities to shore up growth. Beijing has a 1 trillion yuan ($140 billion) bond issuance queued up this year to increase infrastructure spending. 



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