(Yicai Global) Dec. 1 -- China’s manufacturing activity remained in contraction territory for a fourth month in a row despite a small gain in November, as Covid-19 restriction and outbreaks weighed on production and operations, according to a widely watched private survey.

The Caixin purchasing managers’ index for manufacturing came in at 49.4 last month, up from 49.2 in October, data released by financial media group Caixin showed today. A figure below 50 indicates contraction.

The official manufacturing PMI, published yesterday by the National Bureau of Statistics, fell to 48 in November from 49.2 the month prior, the lowest since May.

The pandemic has been spreading in many Chinese cities since last month, resulting in a bigger impact on the economy, said Wang Zhe, a senior economist at Caixin’s think tank. Balancing epidemic control measures and economic development has became the central focus of debate again, he pointed out.

The market is in urgent need of policies to boost employment and steady domestic demand, Wang added, noting that policies should tighten coordination between fiscal and monetary policies and efforts to raise domestic demand to improve the livelihoods of low-income earners.

The employment index for last month declined to the lowest since March 2020, Caixin’s data showed. Companies hired fewer people mainly because of Covid, according to the survey participants. In addition, Covid restrictions stopped people from returning to work, limiting production and damping the need for new hires.

The production index fell below the threshold of 50. The new order index rose, but stayed in negative territory, indicating weak supply and demand in the manufacturing sector.

The manufacturing purchasing price index rose for the second straight month to the highest since July, thanks to rising prices of metals, petroleum, and other raw materials, but remained under 50. The cost of investment rose the fastest among all categories. Companies had to launch sales promotions, given the sluggish demand.

The production and operation expectations index continued to climb, as entrepreneurs were more confident, but it was still lower than the long-term average. Companies predicted output would rise because capacity and demand will resume as the pandemic wanes. The release of new products and the discovery of new markets are also factors behind their predictions.

Editor: Futura Costaglione