A private gauge measuring activity in China’s manufacturing sector slipped in November and fell into contractionary territory, as both domestic and overseas demand waned.
The Caixin China purchasing managers index dropped to 49.9 from 50.6 in October, indicating that overall business conditions faced by Chinese manufacturers were broadly unchanged, according to data released Wednesday by Caixin Media Co. and researcher Markit. A reading below 50 indicates contraction of activity, while a result below 50 means an expansion.
The result points in a different direction from a competing official gauge. The official PMI reading released Tuesday rebounded into expansionary territory in November at 50.1, from 49.2 in October, ending a two-month contraction stemming from a power crunch. The official survey of manufacturers has a much larger sample than the Caixin survey, and tracks large state factories more closely.
“The subindex measuring output rose for the first time in four months as disruption to production schedules from power supply issues eased,” Caixin said. However, new orders from both domestic and abroad fell in November, with some firms linking relatively muted demand conditions to the pandemic and high output prices, Caixin said.
Due to weakened demand, the employment subindex “remained in negative territory for the fourth month in a row in November, with the pace of contraction even steeper than the previous month,” said Wang Zhe, a senior economist at Caixin Insight Group.
Inflationary pressures eased markedly thanks to the impact of regulations to contain surging commodity prices, and the rate of inflation for November was the slowest seen since October 2020, Wang said.