China’s manufacturing sector showed signs of slowdown in November, as factory output growth stalled and domestic demand remained weak, according to a private-sector survey released Monday.

The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 49.9 in November from 50.6 in October, missing the market expectation of 50.5. A reading below 50 indicates contraction. Meanwhile, an official PMI survey released over the weekend showed that factory activity shrank for the eighth consecutive month.

On the export front, the picture was slightly brighter. New export orders expanded at the fastest pace in eight months following a trade truce with the United States in October. Despite this, domestic demand remained sluggish, leading to an overall slowdown in manufacturing output.

Supply chain dynamics reflected the softer activity. Lead times shortened, stocks of purchases fell for the first time in seven months, and inventories of finished goods declined at the fastest pace in nearly three years. Manufacturers cited higher metal prices, which increased input costs, but many opted to absorb these costs while offering discounts, keeping output charges relatively muted.

Despite the current challenges, manufacturers remained cautiously optimistic about the year ahead. Many expect government support, business expansion, and new product launches to spur growth, signaling hope for a pickup in activity in the coming months.

Economists note that while China’s exports may recover, ongoing weakness in the property sector and fading fiscal support underscore the need for additional policy measures. Investors will be closely watching for guidance from the Central Economic Work Conference in December to gauge future manufacturing trends.

Key Takeaway: November data points to a modest contraction in China’s manufacturing, with soft domestic demand offsetting stronger export orders, while inventories and input purchases reflect a cautious approach by producers.