China’s manufacturing sector posted an unexpected contraction in November, as subdued domestic demand continued to weigh on its economic recovery, according to a private survey released on Monday.
The RatingDog General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, dropped to 49.9 last month, undershooting analysts’ expectations of 50.5 in a Reuters poll and slipping below the key 50-point threshold that indicates expansion.
The latest RatingDog survey highlighted a retreat from 50.6 in October and 51.2 in September, signaling slowing activity among export-oriented manufacturers. This private gauge, which typically offers a more optimistic view than official government data, surveyed 650 manufacturers during the latter half of the month.
On the official front, China’s manufacturing PMI indicated an eighth consecutive month of contraction, registering 49.2 in November, a marginal improvement from October’s reading of 49.0. The government survey, which captures data from more than 3,000 companies at month-end, echoed persistent challenges in the sector.
Despite signs of accelerated export orders after a trade truce between China and the United States in October, the boost was insufficient to offset the broader headwinds. “On the demand side, although new export orders picked up in November, this trend failed to reverse the sluggish state of the manufacturing sector,” said Yao Yu, founder of RatingDog.
Production growth stagnated and new orders softened, resulting in renewed job losses and the first decline in purchasing activity since June. Goods producers responded to tepid demand by reducing inventories at the fastest pace since December 2023, reflecting a reluctance to restock amid prevailing uncertainty. Improved supplier communication shortened lead times during the month.
Official statistics published last week showed industrial profits contracted in October, a reversal from the double-digit gains posted in the preceding two months, as weak domestic demand continued to pressure businesses.
