China’s property, demand weaknesses weigh heavy as factory, services activity dent economic recovery efforts
- China’s official manufacturing purchasing managers’ index fell to its lowest reading since July, with the non-manufacturing gauge falling to the lowest level this year
- Readings are likely to continue on a weak trend unless Beijing can support property developers and provide support for consumption, analysts said
Dragged down by insufficient demand and an ongoing property crisis, China’s manufacturing activity remained in contraction in November and its services activity dropped to the lowest level this year, with analysts adding to calls for support to boost consumption.
“This month’s PMI is still weaker than expected, mostly weighed down by the property market,” said Larry Hu, chief China economist at Macquarie.
“If Beijing lacks stronger support, especially to address the credit risk of property developers, China’s PMI is likely to continue its relatively weak trend in the next few months.”
This appears to reflect increased downward pressure on foreign demand
Within the official manufacturing PMI, the new-orders subindex dropped to 49.4 in November, down from 49.5 in October, while the new-export-orders subindex fell to 46.3 from 46.8 in October.