China factory activity edges up but remains in contraction as fading holiday demand hits services

China’s factory activity edged higher in November but remained stuck in contraction for the eighth consecutive month, while services weakened as the boost from earlier holidays faded, according to official data released Sunday.

The manufacturing purchasing managers’ index rose to 49.2, up 0.2 points from October, the National Bureau of Statistics said. The figures were in line with economists’ expectations in a Reuters poll, but remained below the 50-point mark that separates expansion from contraction.

The non-manufacturing business activity index fell to 49.5, down 0.6 points from October, while the composite PMI output index eased to 49.7, indicating a slight pullback in both manufacturing and services activities.

Supply and demand in manufacturing improved modestly, said Huo Lihui, chief statistician at the bureau’s Service Industry Survey Center, with the production index reaching the 50 threshold and new orders rising to 49.2.

High-tech manufacturing stayed in expansion for a tenth straight month at 50.1, even as equipment manufacturing and consumer goods producers slipped below 50. Energy-intensive industries posted a mild rebound to 48.4, up 1.1 percentage points from October.

Business activity for small enterprises recorded a significant rebound. The PMI for small enterprises jumped 2 percentage points to 49.1, its highest in nearly six months, while medium-sized firms edged up to 48.9. Large manufacturers weakened, falling to 49.3.

Market confidence showed a slight uptick. The index measuring expectations for production and operations rose to 53.1. Industries including non-ferrous metal smelting and aerospace-related equipment reported particularly strong sentiment, with readings above 57.