China factory activity surprisingly expands in November, hits 3-month high

Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.7 in November from 49.5 in October

With China’s economy still facing a bumpy recovery, the official manufacturing purchasing managers’ index (PMI) fell to 49.4 in November

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Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.7 in November from 49.5 in October. Photo: AFP

Published: 9:59am, 1 Dec 2023

China’s factory activity unexpectedly expanded in November, driven by rising orders, a private survey showed on Friday, but sluggish external demand continues to weigh on manufacturers.

The Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rose to 50.7 in November from a 49.5 reading in October, marking the fastest expansion in three months and surpassing analysts’ forecasts of 49.8. The 50-point mark separates growth from contraction.

The manufacturing sector is struggling to recover with the official manufacturing PMI falling for the second month on Thursday, despite China’s better-than-expected economic growth in the third quarter.

The official and Caixin surveys have different samples, with the Caixin PMI focusing on export-oriented enterprises and small and medium-sized enterprises in the country’s coastal region.

“The economy is running at different speeds across industries, though we expect the policy stance to remain proactive which will help to sustain overall growth momentum into the coming quarters,” economists at HSBC said on Thursday.

The data was supported by the quickest rise since June in new orders received by Chinese goods producers in November.

Factory owners, hence, expanded their production and purchasing activity with the two subindices rebounding to growth in November from contractions in October.