An official survey of Chinese manufacturers showed that factory activity last month contracted for a second straight month, an indicator of weak demand despite various stimulus measures aimed at supporting the economy.
The official manufacturing purchasing managers’ index (PMI) fell to 49.4 last month, down slightly from October’s 49.5, data released yesterday by the Chinese National Bureau of Statistics showed.
A figure below 50 indicates a contraction in manufacturing activity while a number above 50 reflects an expansion, on a scale up to 100.
Photo: AFP
The index has fallen in seven of the past eight months, with an increase only in September.
The new orders subindex contracted for a second straight month, while two other subindices for raw material inventory and employment were also lower.
China’s recovery from the COVID-19 pandemic has faltered after an initial burst of growth earlier in the year faded more quickly than expected.
Despite prolonged weakness in consumer spending and exports, the economy is expected to grow about 5 percent this year.
Capital Economics’ Sheana Yue (余惠悅) and Julian Evans-Pritchard wrote in a note that the latest surveys might be “overstating the extent of slowdown due to sentiment effects.”
“That turned out to be the case in October, with the hard data not quite as weak as the PMIs had suggested,” Yue and Evans-Pritchard wrote.
The government has over the past few months raised spending on the construction of ports and other infrastructure, cut interest rates and eased curbs on home-buying.
China’s policy advisers have called for still stronger stimulus measures to revive the economy.
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