Factories feel Covid heat in mainland

China's factory activity shrank last month as widespread Covid curbs disrupted manufacturers' output, a private-sector survey showed yesterday, weighing on employment and economic growth in the fourth quarter.

The Caixin/S&P Global manufacturing purchasing managers' index rose slightly to 49.4 in November from 49.2 the previous month and beat expectations of 48.9.

But the reading marks the fourth monthly contraction in a row as the 50-point index mark separates growth from contraction on a monthly basis.

The figure followed downbeat data in an official survey on Wednesday, with manufacturing activity falling to a seven-month low in November, hit by prolonged lockdowns and curbs in many places, including Beijing and Guangzhou.

Analysts see mounting downside risks to China's economic growth in the fourth quarter despite a flurry of policies to shore up activity, including reserve requirement ratio cuts and support to rescue the sluggish property sector.

Greater difficulties were seen in the sector's job employment. The rate of job shedding was the quickest since February 2020, as some workers were unable to return to work due to virus curbs, while production constraints weighed on staffing levels.

"The market is in urgent need of policies to promote employment and stabilize domestic demand," said Wang Zhe, an economist at Caixin Insight Group, suggesting policymakers further coordinate fiscal and monetary policy to expand demand and boost income of the poor population.

Reuters