China's Manufacturing PMI at 49.4 in November... Economic Contraction for 2 Consecutive Months

China's manufacturing sector has shown signs of slowdown for two consecutive months. Due to instability in the real estate market and employment difficulties, consumption has decreased, causing the service sector index to fall below the baseline for the first time.

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According to the National Bureau of Statistics of China on the 30th, China's manufacturing PMI for November was recorded at 49.4, down 0.1 points from the previous month. This is below the market expectation of 49.8. The PMI, which surveys purchasing managers in companies about the economy, is an indicator showing trends in the relevant sector. A value above 50 indicates economic expansion, while below 50 indicates contraction.

China's manufacturing PMI had been below 50 since recording 49.2 in April, failing to surpass 50 continuously, but in September, it reached 50.2 for the first time in six months, raising expectations for economic expansion. However, it showed contraction phases in October (49.5) and last month, increasing concerns about the economy.

Among the five major indices that make up the manufacturing PMI, the production index (50.7, down 0.2 points from the previous month) and the on-time delivery index (50.3, up 0.1 points from the previous month) exceeded the baseline of 50. However, the new orders index (49.4, down 0.1 points), raw materials inventory index (48.0, down 0.2 points), and employment index (48.1, up 0.1 points) remained below 50.

The non-manufacturing PMI this month also fell by 0.4 points from the previous month to 50.2. The non-manufacturing PMI measures activities in construction and service sectors.

The non-manufacturing PMI peaked at 58.2 points in March this year, then declined to 56.4 (April), 54.5 (May), 53.2 (June), 51.5 (July), and 51.0 (August), before rebounding to 51.7 points in September. However, it dropped by 1.1 points to 50.6 in October within a month.

In particular, the service sector indicator worsened. While the construction activity index rose 1.5 points from the previous month to 55, the service activity index fell 0.8 points to 49.3. The service sector index had peaked at 56.9 in March and generally showed a downward trend. However, this month marks the first time this year that it fell below the baseline of 50. Bloomberg analyzed, "The decline in home sales is suppressing demand for everything from household goods to interior decoration and home appliances," adding, "The rebound in the service sector, which was a major driver of recovery earlier this year, is diminishing, and the gloomy employment market is making consumers cautious about additional spending."

This content was produced with the assistance of AI translation services.