China’s factory activity contracts on COVID-19 curbs

China’s factory activity contracts on COVID-19 curbs

China’s factory activity shrank in October, official data showed Monday, after industries were hit by strict COVID-19 lockdowns.

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The Purchasing Managers’ Index (PMI) -- a key gauge of manufacturing in the world’s second-biggest economy -- came in at 49.2, down from September’s 50.1 and below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics (NBS).

Sporadic COVID-19 lockdowns around China have dampened demand and business confidence.

The manufacturing PMI has been in contraction territory for six out of the past eight months, as sweeping COVID-19 restrictions paralyzed major industrial cities such as Shanghai, Shenzhen and Chengdu and a summer of searing heat hit production.

“In October, affected by the frequent appearance of domestic outbreaks, China’s purchasing managers’ index declined,” NBS senior statistician Zhao Qinghe said in a statement.

Zhao said “the foundation for China’s economic recovery and development needs to be further consolidated,” noting both weakened demand and rising raw material prices.

While activity at larger businesses expanded in October, work at small and medium-sized enterprises contracted significantly, with Zhao saying “the pressure on production and operation at small and medium-sized enterprises has increased.”

Meanwhile the non-manufacturing