According to a private-sector survey released on Monday, China's factory activity shrank marginally in November as new orders slowed and production growth stopped.
S&P Global's RatingDog China General Manufacturing Purchasing Managers Index (PMI) fell to 49.9 in November from 50.6 in October, falling short of experts' predictions of 50.5 in a Reuters survey. Growth and contraction are distinguished by the 50-mark.
Factory activity decreased for the eighth consecutive month, according to an official PMI survey released on Sunday. "On the demand side, although new export orders picked up in November, this trend failed to reverse the sluggish state of the manufacturing sector," stated Yao Yu, the creator of RatingDog.
According to the RatingDog poll, new export orders increased at the fastest rate in eight months after China and the United States agreed to a trade truce in October, amid claims of successful business growth initiatives. However, despite fierce rivalry for manufacturers, export fees only slightly decreased.
Industrial profits fell in October, according to official data released last week, following double-digit growth in the preceding two months as companies struggled with weak domestic demand.
Recurring employment losses and the first decline in purchases since June resulted from softening new orders at home. Lead times decreased in November as a result of fewer purchases and better supplier communication.
For the first time in seven months and at the fastest rate since December 2023, stocks of purchases decreased as a result of slower input product replenishment. Because of the slowing growth in demand, manufacturers of goods were hesitant to keep more inventory.
Additionally, finished products stocks ran out at the fastest rate in almost three years. Higher metal prices, according to manufacturers, increased input costs.
However, companies chose to absorb the slight increase in expenses and continued to provide discounts, which led to a decrease in production fees.
For the next 12 months, businesses were generally optimistic about sales and output, with optimism rising since October. They anticipate that corporate expansion, new product releases, and supporting government policies will all contribute to growth in the upcoming year.
Economists predict that China's exports will begin to increase once more, but they note that requests for additional policy support were strengthened by the property sector's ongoing drag and a diminishing fiscal tailwind. Investors are watching the Central Economic Work Conference in December for policy indications.
