BEIJING Reuters -- China's factory activity fell into contraction in November as subdued demand, shrinking employment and elevated prices weighed on manufacturers, a business survey showed on Wednesday.
The PMI of Caixin Manufacturing Purchasing Managers' Index fell to 49.9 in November from 50.6 the month before, versus analyst expectations of 50.5 in a Reuters poll. The 50 mark separates growth from contraction on a monthly basis.
The world's second-largest economy, which staged an impressive rebound from last year's pandemic slump, has lost momentum since the second half as it struggles with a slowing manufacturing sector, debt problems in the property market and COVID-19 outbreaks.
Analysts expect the slowdown in gross domestic product GDP to continue in the fourth, with demand expected to remain soft due to the prolonged global COVID-19 pandemic.
The findings from the private survey, which focused more on small firms in coastal regions, contrasted with the findings from an official survey on Tuesday that showed manufacturing activity grew for the first time in three months.
Supply in the manufacturing sector recovered while demand weakened. The easing of the power crunch has slowed the pace of production recovery, according to Wang Zhe, senior economist at Caixin Insight Group.
Demand was relatively weak, suppressed by the COVID-19 epidemic and rising product prices. Production expanded for the first time in four months in November, while new orders fell into contraction, according to the Caixin survey.
After the relentless build-up in the past few months, cost pressures are finally easing as government efforts to curb record high raw material prices pay off.
A sub-index for input prices dropped to 52.3 from 65.1 the previous month, leading to a slowdown in output price inflation.
The firm reported that steel prices fell at a steep pace in November, while the prices of chemicals and electronics remained high, according to the survey.
Wang from Caixin Insight Group urged policymakers to focus on supporting small companies and pay attention to problems such as deteriorating employment, limited household income growth and weak purchasing power for consumer goods.
The prices of some raw materials remained high. Enterprises are facing high cost pressures.