Driven by a surge in new work orders, China's extensive manufacturing sector demonstrated an impressive expansion for the second consecutive month. The seasonally adjusted China Caixin purchasing managers index (PMI) climbed to 51.5 in November, marking its highest level in five months, up from 50.3 in October.
This upward movement signifies a robust growth trajectory, surpassing the pivotal threshold of 50 that separates growth from contraction. Factory managers in China recorded an exceptional increase in new orders throughout November, with notable contributions from international clients. New orders placed with Chinese manufacturers surged at one of the swiftest rates observed in three and a half years.
Additionally, a renewed rise in export orders significantly bolstered the overall increase in new orders. However, this optimistic outlook is partially offset by the rising costs of inputs and selling prices. Input prices experienced their steepest increase in five months due to surging raw material costs.
Consequently, manufacturers passed on these additional cost burdens to their clients, resulting in the fastest growth in selling prices since October 2023. Despite these inflationary pressures, manufacturers maintain a positive outlook for the future. Indicators suggest that firms remain hopeful that improved economic conditions and supportive government policies will enhance sales in the upcoming year. The Caixin manufacturing PMI was compiled by insights from S&P Global based on survey responses from 650 private and state-owned manufacturers collected between November 12 and November 21.
In a related report, the official PMI for China’s manufacturing sector settled at 50.3 in November, a slight increase from 50.1 in October, as reported by the National Bureau of Statistics (NBS)..