China Caixin Manufacturing Gauge Slipped in November on Weaker Demand

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A private gauge measuring activity in China’s manufacturing sector slipped in November and fell into contraction territory, as both domestic and foreign demand eased.

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The Caixin China Purchasing Managers Index fell from 50.6 in October to 49.9, according to data released Wednesday by Caixin Media Co and ResearcherMarket, indicating that the overall business conditions faced by Chinese manufacturers were broadly unchanged. A reading below 50 indicates contraction of activity, while a result below 50 means expansion.

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The result points in a different direction from a competing official gauge. The official PMI reading released on Tuesday returned to an expanded zone at 50.1 in November, up from 49.2 in October, ending a two-month contraction stemming from power outages. The official survey of manufacturers has a much larger sample than the Caixin survey, and tracks large state factories more closely.

“Subindex measuring output increased for the first time in four months as disruption to the production schedule from power supply issues reduced,” Caixin said. However, new orders from both domestic and overseas fell in November, with some firms linking relatively low demand conditions to the pandemic and higher production prices, Caixin said.

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Due to weak demand, the employment sub-index “remained in negative territory for the fourth consecutive month in November, with the pace of contraction even faster than the previous month,” said Wang Zhe, a senior economist at Caixin Insight Group.

Mr. Wang said inflation pressures have clearly eased due to the impact of regulations to control rising commodity prices, and that the inflation rate for November was at its slowest pace since October 2020, Mr. Wang said.

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