China's Manufacturing Sector Expands Most In A Decade

China's manufacturing sector logged its strongest growth in a decade in November, to indicate a sustained recovery from the Covid-19 outbreak, survey data from IHS Markit showed Tuesday.

The Caixin manufacturing Purchasing Managers' Index rose to 54.9 in November from 53.6 in October. A score above 50 indicates expansion in the sector.

This was the highest score since November 2010. The sector has expanded in each of the past seven months.

Manufacturing companies reported that production increased at the fastest pace in ten years driven by new orders as well as further recovery from the Covid-19 related disruptions seen earlier in the year.

New orders also advanced the most in a decade underpinned by firmer domestic demand. Growth in new export work was not as marked as that seen for total new orders.

The sustained and strong upturn in client demand led to the fastest increase in employment since May 2011. At the same time, firms raised their purchasing activity at the steepest rate since January 2011.

Greater market demand contributed to stronger inflationary pressures, with both input costs and output charges rising at sharper rates, the survey showed.

Business confidence regarding the 12-month outlook for output remained strongly positive in November, despite easing slightly since October.

"We expect the economic recovery in the post-epidemic era to continue for several months," Wang Zhe, senior economist at Caixin Insight Group said.

"At the same time, deciding how to gradually withdraw the easing policies launched during the epidemic will require careful planning as uncertainties still exist inside and outside China," the economist added.