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HISTORY: Chinese factory activity declined in October.
This is not due to declining global demand and strict COVID-19-like national restrictions, which have affected production and shipping in the world’s second-largest economy.
The official index of production managers, or PMI, fell to 49. 2 from 50. 1 in September, the National Bureau of Statistics said on Monday.
That falls below the 50-point mark separating expansion from contraction, after economists in a Reuters vote forecast the PMI would reach precisely 50. 0.
Meanwhile, the non-manufacturing PMI, which examines sector activity, fell to 48. 7 from 50. 6 in September.
Many economists see China’s current zero-COVID policy as a major economic constraint, but expect the restrictions to remain in place for some time after this month’s Communist Party Congress.
Since last week, 31 cities have implemented other degrees of lockdown or district-based measures, affecting more than 230 million people, Nomura researchers found.
The lockdown measures would disrupt production at iPhone maker Foxconn’s factory, with a migrant noted leaving the huge meeting plant in the COVID-stricken city of Zhengzhou amid considerations about infection.
A user with direct knowledge of the case told Reuters that COVID-19 issues at the Zhengzhou plant may reduce the site’s iPhone production to 30% in November.
Economists say slowing exports, a suffering real estate market and the yuan’s weakness vis-à-vis the United States have also weighed on China’s outlook.
The most recent Reuters ballot forecasts 3. 2% expansion by 2022, well below the country’s target of 5. 5%.