SHANGHAI — China’s Purchasing Managers’ Index (PMI) has fallen to a three-year low in November.
Data released Tuesday by the country’s National Bureau of Statistics (NBS) showed last month’s PMI slip to 49.6, down from 49.8 in October, and the lowest reading since August 2012.
Once again, China’s PMI missed forecasts — which mostly predicted the index to hold steady — and came in below the 50-point threshold that indicates a contraction in manufacturing activity.
Less than an hour after the official NBS PMI was released, the Caixin/Markit China Manufacturing Purchasing Managers Index, a private survey that focuses on small and medium-sized firms, showed a reading of 48.6 for November, up from 48.3 in October.
According to Caixin, this slowing rate of contraction is reason to hope that the government’s numerous policies aimed at kick-starting the sluggish economy, including six interest rate cuts in the past 12 months, are having an impact.
“This indicates that pressure on economic growth has eased and fiscal policy has had a strong effect,” He Fan, chief economist at Caixin Insight Group said in a statement.
“Overall, the economy is still on track to become more stable.”
In contrast to manufacturing, the official services sector PMI performed well, with the index reaching 53.6 — compared to October’s reading of 53.1.
The government has made no secret of its desire to shift China’s economy to a consumer-driven model, with a major focus on boosting consumption in the Communist Party’s latest five-year plan, some details of which have been released over the past month, as well as in recent policy announcements from the country’s State Council, which is presided over by Premier Li Keqiang.
According to analysts from Nomura, the rise in the services sector is likely to have been driven by online sales over Singles’ Day on Nov. 11.
Shanghai’s stock market was virtually unmoved by the data. The SSE gained almost half a percentage point over the day to finish at 3,456.