China’s November Manufacturing PMI Contracted Ahead of US Trade Talks

Dec. 03, 2018

In November, China’s manufacturing sector’s growth stalled for the first time in 28 months with the slowing down of new orders. The reading weighs China’s shoulder more during the preparations of the trade discussion with the U.S. this weekend.

On Friday, the country’s National Bureau of Statistics (NBS) released the official Purchasing Managers’ Index (PMI). The manufacturing PMI showed a drop to 50.0 in November, down from 50.2 in October, and the lowest since July 2016.

The 50 points indicated a neutral territory, where there is no activity expansion or contraction on a monthly basis.

The NBS also stated that the increasing insecurities amid the trade frictions exposed China’s exports and imports to a growing downward pressure. The new orders sub-index fell from 50.8 in October to 50.4 in November. Export orders maintained the downtrend for the sixth consecutive month. Chinese manufacturers are reported to have continued declining import orders for foreign commodities, which slightly weakening production output.

Softer demand drove the factory-gate prices down sharply, contracting for the first time since March. Profit growth also down for six months in a row.

The readings suggested that the measures taken by Beijing in the past few months have yet shown a significant impact. Going forward, analysts opined that the business conditions in China will continue to slump before showing improvements.

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