As American manufacturing continues to show slow growth and stability, the Chinese manufacturing industry has posted another month of disappointing figures. According to the Associated Press, Chinese factories saw a sluggish November, with the purchasing managers' index (PMI) dropping to 50.3 from 50.8 in October. While an index of more than 50 indicates positive growth, if current rates continue, the Chinese manufacturing economy could dip beneath that threshold by the end of the year.
Experts had expected the index to fall, but not as significantly as data shows. Analysts had predicted a 50.6 for the month of November, which would have been a less sharp decline in growth than the 0.5 drop the PMI showed.
Analysts attribute the decrease in factory activity to the rising cost of manufacturing and declining demand. Recently, HSBC released results from a private survey which showed manufacturing output in China at its lowest point since May, at a reading of 49.6. The unfavorable manufacturing conditions may be linked to other economic pressures on the Chinese economy as a whole, said Alastair Chan of Moody's Analytics.
"Firstly, there are signs the recent export boom is fading. Meanwhile, the housing market and related sectors such as steel and cement manufacturing, remains in a slump," said Chan.
The news comes as The Wall Street Journal reports American manufacturing is "alive and well," with the Supply Management index reaching a healthy 59 in October, matching a three-year high. Experts predict that figure will drop slightly to 58 in November, though both figures are substantially above the 50 point threshold. The newspaper reports increasing hiring, varied energy sources and leaner machine shops as a cause for optimism moving ahead into the New Year.