Chinese Manufacturing Contracts For 2nd Straight Month

China's manufacturing activity contracted for a second straight month in November, and at a quicker pace, suggesting more stimulus will be needed to shore up economic growth and restore confidence that the authorities can ably support the industry, as reported by Joe Cash for Reuters.

Better-than-expected data for the third quarter led many banks to upgrade their growth forecasts for the world's second-largest economy.

Better-than-expected data for the third quarter led many banks to upgrade their growth forecasts for the world's second-largest economy, but despite a flurry of policy support measures, negative sentiment among factory managers appears to have become entrenched in the face of weak demand both at home and abroad.

The official Purchasing Managers Index (PMI) fell to 49.4 in November from 49.5 in October, staying below the 50-point level demarcating contraction from expansion, according to data from the National Bureau of Statistics (NBS).

It missed a forecast of 49.7, and only Goldman Sachs and Standard Chartered predicted it would come in so low out of 31 respondents. The new orders sub-index contracted for a second consecutive month, while the new export orders component extended its decline for a ninth month.

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