A worker walks in front of molten steel at a steel factory in Huai’an, eastern China’s Jiangsu province, on July 22, 2025.
– | AFP | Getty Images
Official data released on Sunday showed that China’s factory activity rose slightly in November but remained in contraction for the eighth consecutive month, while services weakened as the boost from earlier periods’ holidays wore off.
According to the National Bureau of Statistics, the Manufacturing Purchasing Managers’ Index stood at 49.2, up 0.2 points from October. The figure was in line with economists’ forecasts polled by Reuters, but remained below the 50-point mark that separates expansion from contraction.
The non-manufacturing business activity index was 49.5, down 0.6 points from October, and the composite PMI production index fell to 49.7, indicating a slight decline in activity in both manufacturing and services.
Huo Lihui, chief statistician of the bureau’s service industry research center, said supply and demand in the manufacturing industry improved moderately, with the production index reaching the benchmark of 50 and new orders rising to 49.2.
High-tech manufacturing continued to expand for the 10th consecutive month at 50.1, but equipment manufacturing and consumer goods manufacturers fell below 50. Energy-intensive industries recorded a moderate recovery to 48.4, up 1.1 points from October.
Small factories recorded the most significant improvements. The PMI for small and medium-sized enterprises rose to 49.1, the highest level in about six months, while the PMI for medium-sized enterprises rose to 48.9. Major manufacturers slumped, dropping to 49.3.
Market confidence showed a slight increase. The index showing expectations for production and operations rose to 53.1. Industries such as nonferrous metal smelting and aerospace equipment reported particularly strong sentiment, with readings above 57.
Holiday boost fades out
Non-manufacturing activity, including construction and services, softened, weighing on services. Huo believes part of this decline is due to the effects of traditional holiday spending waning.
China’s Golden Week, which usually sees a rise in travel and consumer spending before activity normalizes the following month, lasted from October 1 to 8 this year.
Services sector activity fell to 49.5, down 0.6 percentage points from October, but some strong spots remained, with rail transport, telecommunications, broadcasting and satellite communications, and financial services all recording readings above 55.
Real estate and housing services remained below the 50 level, highlighting the continued weakness in real estate-related activity. Construction activity improved to 49.6, supported by strong expectations for near-term growth, and the sector’s sentiment index rose to 57.9.
The non-manufacturing new orders index fell to 45.7, reflecting the slowdown in demand. Input prices rose to 50.4, and sales prices in the service sector are still below 50, but the decline has narrowed.
The number of manufacturing employment rose slightly to 48.4, and the number of non-manufacturing employment rose slightly to 45.3. Supplier factory delivery time improved to 50.1.
China tracks monthly PMI measurements for about 3,200 manufacturing and 4,300 non-manufacturing companies, which are seasonally adjusted and considered a leading indicator of economic strength.
trade tensions
China’s manufacturing activity has shrunk since April, when U.S. President Donald Trump imposed new tariffs that squeezed producers.
Industrial profits fell 5.5% in October, the sharpest decline since June, a reversal from the strong gains seen in late summer. Profits for major industrial companies rose 1.9% in the first 10 months, slowing from the pace in the first nine months.
The growth rate in the third quarter fell to 4.8%, and the overall Chinese economy cooled down.
Trade tensions with the United States soared in October when Washington threatened to impose new 100% tariffs before the two countries reached a month-end deal in South Korea. The agreement lowers U.S. tariffs on fentanyl from 20% to 10%, suspends Beijing’s rare earth regulations for a year, and restarts China’s purchases of U.S. soybeans and other agricultural products.
Despite the ceasefire, domestic demand remains weak. The prolonged real estate recession and poor working conditions are weighing on consumer spending. Policymakers have signaled long-term efforts to boost consumption and technology independence, but are avoiding large new stimulus measures as the economy remains on track to meet the 5% growth target.
