A worker walks past molten steel at a steel factory in Huai’an, east China’s Jiangsu Province, July 22, 2025.
– | afp | fake images
China’s factory activity rose slightly in November but remained stuck in contraction for the eighth straight month, while services weakened as the momentum from earlier holidays faded, according to official data released Sunday.
The manufacturing purchasing managers’ index rose to 49.2, 0.2 points higher than in October, the National Bureau of Statistics said. The numbers were in line with economists’ expectations in a Reuters poll, but remained below the 50-point mark that separates expansion from contraction.
The non-manufacturing business activity index fell to 49.5, 0.6 points less than in October, while the PMI production composite index fell to 49.7, indicating a slight decline in both manufacturing and services activities.
Supply and demand in the manufacturing sector improved modestly, said Huo Lihui, chief statistician of the bureau’s Service Industry Survey Center, with the production index reaching the threshold of 50 and new orders rising to 49.2.
High-tech manufacturing remained expanding for the 10th straight month at 50.1, even as equipment makers and consumer goods producers fell below 50. Energy-intensive industries posted a slight rebound to 48.4, up 1.1 percentage points from October.
Small business activity saw a significant rebound. The PMI for small businesses jumped 2 percentage points to 49.1, its highest level in nearly six months, while midsize businesses rose to 48.9. Large manufacturers weakened, falling to 49.3.
Market confidence showed a slight rebound. The index that measures expectations for production and operations rose to 53.1. Industries including non-ferrous metal smelting and aerospace-related equipment reported particularly strong sentiment, with readings above 57.
The Christmas impulse fades
Non-manufacturing activity, which encompasses construction and services, weakened, weighed down by services. Huo attributed the drop in part to the fading impact of earlier holiday-fueled spending.
China’s Golden Week holiday, which typically boosts travel and consumer spending before activity normalizes in the following months, ran from Oct. 1 to Oct. 8 this year.
Services sector activity fell to 49.5, 0.6 percentage points lower than in October, although pockets of strength persisted: rail transportation, telecommunications, broadcasting and satellite transmission, and financial services all recorded readings above 55.
Real estate and residential services continued below the 50 mark, underscoring the persistent weakness in property-related activity. Construction activity improved to 49.6, helped by stronger expectations for near-term growth, with that sector’s sentiment index rising to 57.9.
The non-manufacturing new orders index fell to 45.7, reflecting weaker demand. Input prices rose to 50.4 and service sector sales prices, although still below 50, reduced their decline.
Manufacturing employment increased slightly to 48.4, while non-manufacturing employment increased marginally to 45.3. Supplier lead times for factories improved to 50.1.
China surveys about 3,200 manufacturing companies and 4,300 non-manufacturing companies for monthly PMI readings, which are seasonally adjusted and considered a leading indicator of economic momentum.
Trade tensions
China’s manufacturing activity has contracted since April, when US President Donald Trump launched new tariffs that put pressure on producers.
Industrial profits fell 5.5% in October, the sharpest drop since June, reversing the strong gains seen in late summer. Profits for the first ten months of the main industrial companies increased by 1.9%, slowing compared to the January-September pace.
The broader Chinese economy has cooled as growth fell to 4.8% in the third quarter.
Trade tensions with the United States soared in October when Washington threatened new 100% tariffs before both sides reached a deal at the end of the month in South Korea. The deal reduced U.S. tariffs tied to fentanyl from 20% to 10%, suspended Beijing’s rare earth controls for a year and reopened China’s purchases of American soybeans and other agricultural products.
Despite the truce, domestic demand remains weak. A prolonged housing crisis and weak working conditions are weighing on consumer spending. Officials have signaled a longer-term push to increase consumption and technological self-sufficiency, but have avoided major new stimulus as the economy remains on track to meet its 5% growth target.
