China’s factories lost more momentum in November, according to a key monthly survey of manufacturing firms, with domestic demand again looking bleak despite a recent boost in infrastructure spending.
The official manufacturing Purchasing Managers’ Index (PMI) dropped to 50.0 last month from 50.2 in October, marking the lowest reading in over two years and falling short of market forecasts (Bloomberg media: 50.2). A score of 50 denotes no growth in the sector, with anything above indicating expansion.
New orders were particularly weak, the data shows, reflecting China’s broader cyclical difficulties.
The official non-manufacturing PMI, also released on Friday, fell from 53.9 to a 15-month low of 53.4, on the back of a steep drop in construction activity in November.
“With credit growth still slowing and regulators yet to unleash off-budget fiscal support, growth is likely to weaken further in the coming months,” said Julian Evans-Pritchard, senior China economist at Capital Economics.