Link Securities | China’s official manufacturing purchasing managers’ index, the manufacturing PMI, rose slightly in November to 49.2 points, from 49.0 points the previous month, in line with analysts’ consensus expectations. We note that a reading above 50 points indicates expansion of activity compared to the previous month, while a reading below that level indicates contraction.
The underlying components showed an improvement, with production turning neutral. Meanwhile, declines in new orders and new export orders slowed amid stabilising domestic and external demand. Similarly, price components showed that inflationary pressures from raw materials accelerated.
Meanwhile, China’s official non-manufacturing purchasing managers’ index, the non-manufacturing PMI, fell to 49.5 points in November from 50.1 points the previous month, compared with the consensus expectation of 50.0 points, marking the first contraction in this index since China ended its Covid-19 lockdowns at the end of 2022. New orders accelerated their pace of decline amid weakness in the construction and services sectors, reflecting a deepening recession in the property development sector. In addition, the services sector turned negative for the first time since September 2024, with China’s National Bureau of Statistics (NBS) attributing the decline to the comparison with the strong performance during the October holidays.
In addition, China’s manufacturing purchasing managers’ index, the manufacturing PMI published by RatingDog, fell in November to 49.9 points from 50.6 points the previous month, also falling below the consensus forecast of 50.5 points. It should be noted that a reading above 50 points indicates expansion in activity compared to the previous month, while a reading below that level indicates contraction.
Production stagnated amid weak new orders, despite eight-month highs in new export orders following the trade truce between the US and China. Policymakers have resisted calls to expand their stimulus measures amid weak demand.
