China manufacturing sector expansion accelerates in November
, China
Photo by Jason Hu | Pexels

China's manufacturing sector expansion accelerates in November

This is the fastest growth since June 2024.

China's manufacturing sector saw accelerated growth in November as it entered the final quarter of the year.

A notable increase in new orders, including international demand, contributed to enhanced production levels. Purchasing activity and inventory levels also rose as confidence grew, driving faster growth in the sector.

The seasonally adjusted Purchasing Managers’ Index rose to 51.5 in November, up from 50.3 in October. This marks a second consecutive month of improvement for the manufacturing sector.

The latest figures indicated that growth is at its highest level since June, exceeding the historical average. One key factor driving the successful performance of the manufacturing sector was a significant boost in new business inflows.

Following this uptick in business activity, purchasing actions and inventory stocks also grew, reflecting increased confidence among manufacturers about future conditions. 
Despite these positive indicators, employment figures declined, mainly due to ongoing concerns over rising costs, as input price inflation heightened during November.

New orders received by Chinese producers surged at the fastest rate in three and a half years, complemented by a revival in export orders.

Contributing factors included robust underlying demand, product launches, and stockpiling behaviours linked to the recent U.S. election. Whilst production increased sharply—particularly within intermediate goods—job counts fell for the third month continuously.

Resignations and redundancies contributed to this trend, although job losses moderated compared to October. Nonetheless, purchasing activity improved as manufacturers built up safety stocks in response to increased production needs. Outbound shipment delays were noted, whilst lead times for raw materials stabilised after prolonged extensions. Price pressures were evident as average input costs climbed to their highest level in five months, with firms passing some costs onto consumers, leading to a rise in selling prices.

Despite greater overall supply and demand, manufacturers retained cautious hiring practises.

Confidence within the manufacturing sector showed marked improvement, thanks to optimistic expectations for upcoming government policies and more favourable market conditions.

Whilst the overall outlook appears brighter, challenges remain, particularly regarding employment contractions which signal that labour market recovery may take longer to manifest. Enhanced policy measures are crucial to consolidate economic gains moving forward.

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