Activity in China’s factories expanded at its fastest pace in a decade last month, data showed Tuesday, the latest sign that the world’s number two economy is well on track to recovery from the coronavirus.
The purchasing managers’ index released by Chinese media group Caixin came just a day after official PMI figures showed growth at its fastest in more than three years.
PMIs are a key gauge of activity in the country’s factories, and the Caixin survey covers small and medium-sized enterprises. It is seen by some as a more accurate reflection of China’s economic situation than the official government figures, which more closely track the condition of large state groups.
The 54.9 reading for November smashed expectations – which were for a result around the same as October’s 53.6 – and is the strongest since November 2010. Anything above 50 is considered growth.
The data suggested that manufacturing firms logged a “sharp and accelerated rise in production” in November, with companies attributing this to greater order volumes and recovery from Covid-19 disruptions earlier in the year.
“Underlying data suggested that the upturn continued to be led by firmer domestic demand,” said Caixin.
But it added that despite a substantial rise in purchasing activity, the time taken to receive goods continued to lengthen, with reports of stock shortages at suppliers.
The official November PMI came in at 52.1, data showed Monday, beating the 51.4 seen the month before and back at levels last seen in September 2017.
Julian Evans-Pritchard, senior China economist at consultancy Capital Economics, said the employment component was “particularly encouraging,” adding that improvements in the labor market will drive further recovery in consumption.
Exports are also a factor. “Taken together, both surveys suggest that foreign demand for Covid-19 related products remains strong, amid fresh lockdowns abroad and hints at a further acceleration in export growth in the near-term,” Capital Economics added in a report.