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China's manufacturing PMI shrinks further in Nov, misses expectations

Published Nov 29, 2023 08:43PM ET
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Investing.com-- Chinese manufacturing activity declined further in November, as the sector saw increased headwinds from slowing overseas demand, while growth in the non-manufacturing sector also deteriorated. 

The official manufacturing purchasing managers index (PMI) read 49.4 in November, data from the National Bureau of Statistics showed. The reading was weaker than expectations of 49.6, and contracted from the prior month’s reading of 49.5.

A reading below 50 indicates contraction, with China’s manufacturing PMI now having contracted for six out of the 11 months so far in 2023. 

The manufacturing sector has been struggling with a steady decline in overseas demand for Chinese goods, which saw new orders and production levels drop drastically this year. Continued signs of economic strife in the country’s biggest export markets pointed to few changes from this trend, as U.S., Japan and euro zone economies grappled with slowing consumer spending. 

Demand for services- local and overseas- remained a bright spot for Chinese businesses, but now appeared to be tracking a slump in manufacturing activity. China’s non-manufacturing PMI grew 50.2 in November, missing expectations of 51.1 and declining from the prior month’s reading of 50.6.

The non-manufacturing PMI was at its weakest level in 2023, and was now barely in expansion territory. This saw China’s composite PMI slow to 50.4 from 50.7 in the prior month, also touching its worst level for the year. Overall Chinese business activity was now edging dangerously close to contraction territory. 

A post-COVID economic rebound has largely failed to materialize in China, with business activity levels now edging closer to lows seen during the country's three years of virus-linked lockdowns. Fears of a new pandemic also emerged recently, following a wave of pneumonia infections across the country.

While Beijing attempted to shore up domestic demand with more liquidity injections in recent months, the move offered little relief to local businesses. Chinese consumers turned more cautious over spending this year, which saw the country slip back into disinflation territory in October. 

Investors are now clamoring for more targeted, fiscal measures from Chinese authorities to shore up growth. Beijing has a 1 trillion yuan ($140 billion) bond issuance queued up this year to increase infrastructure spending. 

 

 

China's manufacturing PMI shrinks further in Nov, misses expectations
 

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Comments (2)
Japan Scenario
Japan Scenario Nov 30, 2023 1:39AM ET
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Xi does not find this amusing
TheEnd IsNigh
TheEnd IsNigh Nov 29, 2023 8:52PM ET
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As Peter Zeihan has said many times...this will be China's last decade of significant relevance. That One Child Policy is beginning to chip away at the social structure that allows for significant production. And simultaneously, demand will begin to slump as Boomers reach advanced ages and pass away.
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perplexed76 .
perplexed76 . Nov 29, 2023 8:52PM ET
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Brent Griffiths  20% of young chinese are jobless
Tre Hsi
Tre Hsi Nov 29, 2023 8:52PM ET
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perplexed76 .  probably higher now, except the chinese govt won't release those data anymore
me ish
me ish Nov 29, 2023 8:52PM ET
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TheEnd IsNigh  their production slow down is not due to lack of labour - youth unemployment is above 50% - millions of young men and women eager to work - or forced to - but yeah, the boomer generation is now in retirement and they pull funds out of the markets to spend - and they spend less than when in their working years - add to that the end of qE and monetary tightening and the only folk really spending are the indebted governments - not a good move!
me ish
me ish Nov 29, 2023 8:52PM ET
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perplexed76 .  that's very conservative official figure - in many places it's more like 50%
me ish
me ish Nov 29, 2023 8:52PM ET
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TheEnd IsNigh  it was because of this phenomenon, that the great reset was planned and the virus was released - with everything already planned and in place to more authoritarian digital control of our lives
 
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