China’s manufacturing activity grew at the weakest pace in five months in November as input costs remained high and tougher pollution measures weighed on business confidence, survey showed.
The Caixin/Markit Manufacturing Purchasing Manager’s Index (PMI) dipped to 50.8 from 51.0 in October, but was roughly in line with economists’ expectations for a slight drop to 50.9, the private survey showed.
While the index remained above the 50-point mark that devides growth from contraction on a monthly basis, it was the weakest reading since June and signalled only a marginal improvement in operating conditions, reports Reuters.
Output and new orders rose only modestly, while input costs continued to rise sharply, pressuring profit margins.
Firms were able to pass along slightly more of the price increases to their customers, but still had to cut staff at the fastest pace in three months to reduce costs.
The world’s second-biggest economy has defied market expectations with economic growth of 6.9 per cent in the first nine months of the year, supported by a construction boom and robust exports.
But factory activity has shown signs of cooling in the past few months as Beijing extended a crackdown on financial risks, which has increased borrowing costs and weighed on new investment.
