BEIJING – China‘s factory activity unexpectedly picked up in November, increasing for the first time in three months due to soaring commodity prices and electricity rationing facilitated, taking some pressure on the manufacturing sector.
The official manufacturing purchasing managers index (PMI) rose to 50.1 in November from 49.2 in October, data from the National Bureau of Statistics (NBS) showed on Tuesday.
The 50 point mark separates growth from contraction. Analysts had expected it to hit 49.6.
The world’s second-largest economy, which experienced an impressive rebound from last year’s pandemic crisis, lost momentum in the second half of this year as it grapples with the manufacturing slowdown, problems of debt in the real estate market and the COVID-19 epidemics.
Analysts expect the slowdown in gross domestic product (GDP) seen in the third quarter to continue into the fourth, with demand expected to remain weak.
“A series of recently introduced policies and measures to secure energy supply and stabilize market prices have proven to be effective,” said Zhao Qinghe, senior statistician at NBS.
“Rationing of power facilitateD somewhat in November while the prices for some commodities fell significantly, causing the manufacturing PMI to expand.
Reflecting the positive overall PMI, a sub-index for production rose to 52.0 in November from 48.4 in October, as new orders fell at a slower pace, although November marked the fourth consecutive month. decrease in customer demand.
There were also signs of relief elsewhere in Asia with the Japanese factory production increased for the first time in four months in October, as facilities in other parts of the region resumed operations after COVID-19 shutdowns.
The recovery in supply has helped cool the prices of essential production materials.
An input price sub-index in China’s PMI stood at 52.9 in November, down significantly from 72.1 the previous month, indicating easing cost pressures.
This lowered the prices charged, dropping for the first time since May 2020.
Despite the improvement, Nie Wen, an economist at Hwabao Trust, said he expects the manufacturing PMI to hover around 50 for the coming months, due to constraining factors such as power cuts, high commodity prices and lower consumption.
Analysts also warn there could be further restrictions on manufacturing in the north China due to the upcoming Beijing Winter Olympics while the impact of the new COVID-19 strain Omicron on Chinathe economy remains to be seen.
Factory Door inflation peaked in 26 years in October, further squeezing producer profit margins and heightening fears of stagflation. As a result, political sources claim ChinaThe central bank is likely to proceed cautiously in easing monetary policy to support the economy.
Premier Li Keqiang admitted last week that ChinaSouth Africa’s economy faces further downward pressure, but authorities should avoid one-size-fits-all “aggressive” policy responses.
Unlike the rising factory In the private sector, growth in the services sector slowed slightly, with the official non-manufacturing PMI index in November falling to 52.3 from 52.4 in October.
New lockdown measures like China rushed to contain the latest COVID-19 outbreak weighed on services activity, which was otherwise supported by rapid construction.
Construction activity the sub-index fell from 56.9 to 59.1 in November.
Chinathe official composite PMI for October, which includes both manufacturing and services activity, stood at 52.2, up from 50.8 in October. – Reuters