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China Caixin manufacturing PMI marks 4th straight month of contraction

A private gauge of activity in China’s manufacturing sector remained in contractionary territory for a fourth straight month in November, as the government’s stringent COVID restrictions continued to weigh on both output and demand.

The China Caixin manufacturing purchasing managers index slightly improved to 49.4 in November from 49.2 in October, according to data released Thursday by Caixin Media Co. and S&P Global.

A reading above the 50 mark suggests activity expansion, while one below that level indicates activity contraction.

The subindexes for output and total new orders were below 50 for the third and fourth consecutive months respectively, said Wang Zhe, senior economist at Caixin Insight Group.

The gauge for new export orders remained in contraction for the fourth consecutive month, showing that global appetite for China’s products continued to wane.

Employment continued to shrink for the eight consecutive month, logging the worst performance since February 2020, as COVID outbreaks made it harder for some workers to return to factories and companies were less willing to recruit new employees to fill the posts, said Wang.

“The market is in urgent need of policies to promote employment and stabilize domestic demand. Beijing should further coordinate fiscal and monetary policies to expand domestic demand and boost incomes of the poorer parts of the population,” said Wang.

On Wednesday, China’s statistics bureau said official manufacturing PMI fell more than expected to 48 in November from 49.2 in October.

Read More: China Caixin manufacturing PMI marks 4th straight month of contraction

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