China's manufacturing PMI expands unexpectedly in November as constraints ease
Updated 16:32, 30-Nov-2021

China's factory activity halted a two-month contraction and rebounded unexpectedly to expansion territory in November as power shortages eased and raw material prices fell. But service sector growth slowed down, hit by the latest COVID-19 outbreaks. 

The official manufacturing Purchasing Manager's Index (PMI) rose to 50.1 in November, the first expansion after 49.2 in October and 49.6 in September, data from the National Bureau of Statistics (NBS) showed on Tuesday.  

A reading above 50 indicates expansion in activities, while a reading below that mark reflects contraction. 

The figure from the NBS was above analysts' expectation of 49.6, according to Reuters, and it also beat the median estimate of 49.7 in a Bloomberg survey of economists. 

"A series of recently introduced policies and measures to ensure energy supply and stabilize market prices has been proven to be effective," said Zhao Qinghe, a senior statistician at the NBS.  

"Power rationing eased somewhat in November, while prices for some raw materials dropped significantly, driving an expansion in manufacturing PMI," he said. 

Zhao said both supply and demand sides picked up, as a sub-index for production rose to 52 in November from 48.4 in October, while a sub-index for new orders went up to 49.4 in November from 48.8 in October. 

According to Zhao, the purchase price index and factory gate price index of major raw materials plunged to 52.9 and 48.9 respectively in November, down 19.2 percentage points and 12.2 percentage points from October, pointing to easing cost pressures. 

"The exports and imports indices continued to rise thanks to the global economic recovery and Christmas shopping season in Western countries," said Zhao. The new export order index and import index increased to 48.5 and 48.1, respectively, in November. 

The official non-manufacturing PMI, which measures activities in the construction and services sectors, fell to 52.3 in November from 52.4 in October, according to NBS. It was above Bloomberg's prediction of 51.5 and has expanded for three consecutive months. 

The recovery of the services sector has slowed down as consumer activities were dampened by sporadic virus outbreaks, according to Zhao. The services sub-index stood at 51.1 in November, with a decrease of 0.5 percentage points from the previous month. 

Expansion in the construction sector accelerated as the construction sub-index rose to 59.1 in November from 56.9 in October, he said.

The official composite PMI, which includes both manufacturing and services activities, stood at 52.2, up from 50.8 in October, NBS data showed. 

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