India’s manufacturing growth slumps to a 25-month low in November

China’s factory activity hit a 39-month low in November as domestic and global demand remained sluggish, but the services sector shone, as expected, official data showed on Tuesday.

The figure marked the 29th consecutive month the index has remained above the 50 threshold that indicates expansion.

In the euro zone, manufacturing PMI for November was confirmed at 52.8. Demand continued to grow and new export orders rose at the fastest pace in more than a year.

China’s manufacturing conditions slipped to the weakest level in more than three years, despite stimulus measures to bolster the world’s No 2 economy, as sluggishness in the nation’s old growth drivers add to risks facing the government’s growth target. The manufacturing index has been in contraction territory in eight out of 11 months so far this year. Manufacturing activities fell to a 25-month low in November because of a slower increase in new work and output. The weakness of the Nikkei Malaysian PMI appeared to largely be driven by a downturn in domestic demand, though export orders barely rose during the month.

The official index, compiled by the Chinese Federation for Logistics and Purchasing, includes larger state-owned businesses.

The PMI is an indicator created to provide a single-figure measure on the health of the industry and for the month of November it showed that, while the figure was positive, it was lower than October’s. Deflationary pressures also intensified, with the survey showed sharper decreases in both factories’ input costs and selling prices, putting more pressure on profit margins. Some observers expect further cuts in interest rates and bank’s reserve requirement ratio – which has been cut several times in the past year – to encourage lending to businesses.

An unofficial manufacturing survey released Tuesday by Chinese media group Caixin and information provider Markit, with a greater focus on smaller firms, also pointed to extended contraction.

“The slowdown in growth combined with weak inflationary pressures support further rate cuts”.

Samuel Tombs, of consultancy Pantheon Macroeconomics, said the survey underlined the fact that while the chancellor may want to rebalance the economy towards manufacturing, creating a “march of the makers”, growth is likely to continue to be reliant on the key services sector.