MNI BRIEF: China's Nov Manufacturing PMI Falls To 7-Month Low

China's Purchasing Managers' Index (PMI) slid to a seven-month low of 48 in November and deeper into the contractionary zone below 50, as renewed outbreaks of Covid-19 disrupted factory activity, data from the National Bureau of Statistics on Wednesday showed.

The decline from 49.2 in October came as the production and new orders sub-indices fell by 1.8 and 1.7 points from October to 47.8 and 46.4, respectively. New export orders sub-index also fell by 0.9 to 46.7 on declining external demand. (See MNI BRIEF: China's Exports Drop In Oct; First Fall Since 2020)

The non-manufacturing PMI fell by 2 points to 46.7, also hitting the lowest level since April. The services activities sub-index further declined by 1.9 points to 45.1, with businesses in transportation, accommodation, catering and entertainment all falling below 38, according to the NBS.

The evidence of ongoing weakness in the world's second largest economy comes as authorities have accelerated efforts to support growth. The People's Bank of China last week cut the reserve requirement ratio by 25bp, freeing up additional liquidity for banks. (See MNI BRIEF: PBOC Cuts RRR By 25 Bp As Covid Clouds Recovery). Authorities have also relaxed a ban on refinancing for real estate developers to ease cash flow constraints and support a property market recovery. Market reaction to the PMI data was muted. (See CHINA DATA : PMIs Disappoint, But Limited Market Impact)