China: Manufacturing activity continued to suffer in November

Manufacturing activity in China continued to suffer in November for the fourth consecutive month, under the effect of the health restrictions of the “zero Covid” policy that are weighing on the whole economy, according to an independent index released on Thursday, December 1. The Purchasing Managers Activity Index (PMI), calculated by IHS Markit for the Caixin media group, came in at 49.4 points last month, up from 49.2 points in October. A number below 50 reflects a contraction in activity.

Since August this index has been consistently in the red. “Supply and demand for manufactured goods continued to contract last month due to increased outbreaks of Covid cases and subsequent containment measures,” said economist Wang Zhe of Caixin Insight.Group. “Overall, the pandemic continues to weigh on the economy,” he adds: “Manufacturing is contracting, demand is under pressure, external demand remains weak, employment is deteriorating, logistics are suffering, and manufacturers are facing an increasing operating pressure”.

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Declining recruitment

Against this backdrop, companies remained cautious in terms of employment, with sector hiring declining in November for the eighth consecutive month, reaching its lowest level since February 2020, according to Caixin. The Caixin Index draws the same conclusion about activity as the government index released on Wednesday (48). The Caixin-Markit survey, which mainly asks SMEs, is believed to provide a more accurate picture of the broader economy. The official data focuses on large public companies.