Caixin China manufacturing PMI dips to 49.9 in Nov as new orders drop

SINGAPORE (ICIS)–Caixin’s China manufacturing purchasing managers’ index (PMI) slipped to 49.9 in November from 50.6 in October amid a drop in new orders, the Chinese media firm said on Wednesday.

This indicated that operating conditions were broadly unchanged on the month after a slight improvement in October.

A PMI reading above 50 indicates expansion in the manufacturing economy, while a lower number denotes contraction.

“Supply in the manufacturing sector recovered, while demand weakened. Relaxing constraints on the supply side, especially the easing of the power crunch, quickened the pace of production recovery,” said Wang Zhe, senior economist at Caixin Insight Group.

The pandemic hurt external demand, with the gauge for new export orders staying in negative territory for the fourth straight month in November, Zhe said.

“After the shortage of power was alleviated, the supply side began to recover. But due to weak demand, the supply recovery was limited, and the foundation of the recovery was not solid,” Zhe said.

“The government’s measures to stabilize commodity supplies and prices began to bear fruit, which significantly eased cost pressures on manufacturing,” he added.

China’s official manufacturing PMI released on 30 November showed a sharp rise in the headline index to 50.1 in November from October’s reading of 49.2.

The Caixin PMI mostly trackers smaller and private firms while the official PMI covers larger, state-owned companies.