The private gauge often provides an early snapshot of export-oriented manufacturers. It surveys about 650 firms and collects responses during the second half of each month, whereas the official PMI, released by the National Bureau of Statistics at month-end, covers more than 3,000 companies. The official manufacturing PMI, published a day earlier, registered 49.2 in November, the eighth straight month of contraction but a slight uptick from October’s 49.0.
S&P Global and RatingDog said production growth “came to a halt” as new orders “nearly stalled” despite the strongest increase in new export business in eight months. The report noted that manufacturers cut staffing levels and scaled back purchases, while managing inventories conservatively in response to cooling demand. Yao Yu, founder of RatingDog, forecast “weak expansion” in December as policymakers strive to meet a full-year growth target of roughly 5%.
Conditions outside the factory floor softened as well. The official non-manufacturing PMI—an index that tracks activity in construction and services—dropped to 49.5, its first contraction since December 2022. The pullback was attributed to ongoing weakness in real estate and residential services, sectors that have struggled to regain footing after a prolonged housing downturn.
A string of recent indicators points to an economy losing steam in the fourth quarter. Fixed-asset investment, which includes spending on property, infrastructure and equipment, declined 1.7% in the January-October period from a year earlier, the steepest slide since the onset of the pandemic in 2020. On a single-month basis, investment slumped 11.4% in October, the worst performance in almost four years.
Property development remained a major drag. Investment in the sector contracted 14.7% in the first ten months, deepening from a 13.9% drop in the first three quarters. Industrial output grew 4.9% year on year in October, while retail sales growth slowed for the fifth consecutive month to 2.9%, both marking the weakest readings since August 2024, according to LSEG data.
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External demand has also cooled. China’s exports fell 1.1% in October from a year earlier, the first decline in nearly two years as earlier front-loading by businesses faded. OCBC Bank estimates that gross domestic product growth could slip below 4.5% in the fourth quarter, down from 4.8% in the July-September period. Markets are watching the upcoming Politburo gathering and the Central Economic Work Conference for signals on policy priorities in 2026.
Trade relations with the United States showed tentative improvement after U.S. President Donald Trump and Chinese President Xi Jinping met in South Korea in late October. Washington agreed to roll back certain tariffs and suspend port fees on Chinese vessels for one year, while Beijing pledged to curb illicit fentanyl exports and resume purchases of American soybeans. Although the truce reduces near-term uncertainty, analysts say it has yet to translate into a meaningful rebound in corporate or consumer demand.
In a note to clients, Bank of America cautioned that aggregate demand is likely to “stay sluggish for longer,” warning that deflationary pressures could persist in 2026 unless domestic spending and investment accelerate. The bank added that the fiscal boost from planned infrastructure projects has not yet filtered through to the broader economy.
Financial markets reacted calmly to the data. Mainland China’s CSI 300 index edged up 0.36% on Monday, while Hong Kong’s Hang Seng Index rose 0.74%. The offshore yuan traded at 7.0711 to the U.S. dollar, showing little immediate impact from the PMI readings.
China’s growth prospects will remain in focus as policymakers prepare to set next year’s agenda. The International Monetary Fund has previously projected that China will contribute roughly one-third of global growth in 2025, underscoring the international implications of any sustained slowdown.
Crédito da imagem: Costfoto | Nurphoto | Getty Images
