China's manufacturing activities shrank for the first time in almost three years last month under dismal external demand, rising production costs and tight domestic liquidity for small firms.
The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities across the country, slipped from October's 50.4 to 49 in November, the lowest since March, 2009.
A reading below 50 indicates a contraction in industrial activities.
The drop was led by declines in new orders and new export orders, both of which scaled back more than 2 points and fell below 50, the China Federation of Logistics and Purchasing, the index compiler, said today in a note.
Also, most producers of raw materials and downstream products reported contracting activities, while manufacturers of consumer goods said their operational conditions still improved.