A private measure of Chinese manufacturing activity expanded at a steady pace in November, a sign that traditional growth sectors continued to provide a much needed boost to the world’s second-largest economy.
The Caixin China manufacturing purchasing managers’ index (PMI) came in at 50.9 in November, compared to 51.2 the previous month and matching analysts’ estimate. Anything above 50 indicates expansion in economic output.
“The Chinese economy continued to improve in November,
although it lost some momentum compared to the previous month. Inventory and employment data also showed the foundation of growth is not solid yet and investors have to remain vigilant about the risk of a downturn in coming months.” Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, said in a statement.
November was the fifth consecutive month manufacturing output expanded. Prior to that, the sector was mired in a prolonged recession that undermined the economy’s stability. Manufacturing contracted for 16 straight months through July. The period was also associated with a sharp slowdown in China’s economic growth, which raised red flags about the health of the world’s preeminent emerging market.
Earlier in the day, the Chinese government released its official manufacturing PMI covering large and state-run enterprises. The November reading showed the fastest expansion in manufacturing output since mid-2014.
Unlike the government report, the Caixin China manufacturing PMI focuses on small- and medium-sized enterprises.
Beijing also reported faster growth in non-manufacturing sectors. The November non-manufacturing PMI rose 0.7 point to 54.7, a more than two-year high.