Economic Watch: China's manufacturing PMI picks up, signaling improved market confidence

The purchasing managers' index (PMI) for China's manufacturing sector stood at 49.2 in November, up 0.2 percentage points from the previous month, official data showed Sunday.

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

Both production and demand sides saw improvement. The sub-index for production stood at 50.0, up 0.3 percentage points from the previous month -- reaching the critical threshold. On the demand side, the sub-index for new orders came in at 49.2, up 0.4 percentage points, according to the National Bureau of Statistics (NBS).

Regarding specific industries, the production and new order indices for sectors such as agricultural food processing and non-ferrous metal smelting were located in the expansionary zone, indicating active production and demand.

The PMI for small enterprises saw a significant rebound, standing at 49.1 -- up 2 percentage points from the previous month to reach a six-month high. The PMI for large enterprises came in at 49.3, a drop of 0.6 percentage points, while the reading for medium-sized enterprises stood at 48.9, up 0.2 percentage points.

High-tech manufacturing continued to expand, with its PMI standing at 50.1 -- remaining above the critical point for 10 consecutive months, according to the NBS.

Market expectations remained stable with a slight upward trend. The sub-index for production and operation activity expectation stood at 53.1, up 0.3 percentage points from October, indicating that manufacturing enterprises have grown more confident in recent market developments.

Zhang Liqun, an analyst with the China Federation of Logistics and Purchasing (CFLP), noted that the slight rebound in the November PMI indicates an improvement in market confidence.

Zhang attributed this positive shift to factors including the inspiring goals for the 15th Five-Year Plan (2026-2030), noting that these factors have effectively boosted market sentiment, driving increases across the indices for production, demand, purchasing volume, and business expectations.

NBS data showed Sunday that the PMI for China's non-manufacturing sector came in at 49.5 in November, down 0.6 percentage points from the previous month.

He Hui, vice president of the CFLP, attributed the moderation in non-manufacturing operations primarily to seasonal factors.

He noted that the service sector witnessed a pullback following the high base established during the "golden week" holiday in the previous month, but predicted that consumption demand related to year-end festivals is expected to drive a recovery in the sector.

Looking ahead, Wen Tao, an expert with the China Logistics Information Center, expressed optimism for the market trajectory.

Wen noted that as industries enter the final sprint of the year -- a crucial node for policy implementation and capital deployment -- market demand has further room to stabilize and rebound, which will continue to support a steady increase in manufacturing production.