China’s Private PMI Guage Shows Contraction
Private PMI gauge of Caixin shows factory activity in the world's second largest economy has slowed down in November
China’s private gauge of factory activity saw contraction in November amid reduced demand, squeezed employment and inflationary pressure, according to Caixin/Markit business survey.
The Caixin/Markit Manufacturing Purchasing Manager’s Index (PMI) fell to 49.9 in November from 50.6 in October. Reuters poll forecasted the number to come in at 50.5.
Although China posted an impressive rebound in terms of economic numbers, however has lost momentum in the second half due to inflationary pressure, power rationing, looming debt concerns in the property sector.
Earlier on Tuesday, the official PMI numbers showed an expansion at 50.1 in November.
Some market strategists see slowdown in gross domestic product (GDP) in the third quarter to continue to fourth quarter as domestic demand remains low and renewed concerns of Omicron variant.
“Supply in the manufacturing sector recovered, while demand weakened. Relaxing constraints on the supply side, especially the easing of the power crunch, quickened the pace of production recovery,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.