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China official factory PMI at three-year low
[BEIJING] Activity in China's manufacturing sector contracted for a fourth straight month to a three-year low, an official survey showed on Tuesday, adding to signs of persistent economic sluggishness despite a flurry of stimulus moves.
The official Purchasing Managers' Index (PMI) fell to 49.6 in November from the previous month's reading of 49.8, according to the National Bureau of Statistics (NBS), lagging expectations of 49.8 from analysts polled by Reuters.
A reading below 50 points suggests a contraction in activity while a reading above signifies an expansion on a monthly basis.
With subdued demand at home and abroad, activity in China's factories shrank in October for a third straight month, fuelling fears that the economy may be cooling more rapidly than expected.
The sub-index for new orders- a proxy for domestic and foreign demand- fell to 49.8 in November from October's 50.3.
As for the services sector, whose growth has helped offset persistent weakness in manufacturing, the official non-manufacturing PMI rose to 53.6 in November from October's 53.1.
Despite a long series of stimulus measures, including cutting interest rates six times since November last year, muted monthly data for October suggests China's economy has lost further momentum.
Some analysts expect China's economy will bottom out in the fourth quarter as a burst of stimulus measures rolled out by Beijing gradually takes effect, but many remain wary about the outlook.
China's Premier Li Keqiang said last week that China was on track to reach its economic growth target of about 7 per cent this year, and that the economy was going through adjustments to maintain reasonable medium- to long-term growth.
But that would still mark China's weakest economic expansion in a quarter of a century, and some analysts believe real growth levels are much weaker than official data suggest.
Zhou Hao, Senior Emerging Markets Economist at Commerzbank in Singapore, said the manufacturing PMI is at its lowest level in three years.