Barclays_China_Contractionary_PMIs_signal_weaker_domestic_demand

1 https://www.pmi.spglobal.com/Public/Home/PressRelease/d89c3e3b4f7547478bc1331f4637dce6Please see analyst certifications and important disclosures beginning on page 6.ChinaContractionary PMIs signal weakerdomestic demandThe NBS and private manufacturing PMIs both missedexpectations, and the contractionary prints point to weakdomestic demand, while the rebound in new export ordersand shipping data suggest exports remain a key growthdriver. The fall in services PMI, the first time since late 2022, isworrisome.• November NBS manufacturing PMI: 49.2• Bloomberg consensus forecast (Barclays): 49.4 (49.4)• October NBS manufacturing PMI: 49.0Manufacturing PMI contracted for the eighth consecutive month inNovember China’s manufacturing PMI has contracted for the eighth consecutive month in November,making it the longest stretch of contraction on record. The index edged up to 49.2 from 49.0, butthe rebound was smaller than expected (Bloomberg and Barclays consensus: 49.4). Meanwhile,services activity weakened notably as holiday-related boosts faded, slipping below thethreshold for the first time in 14 months. Construction activity showed slight improvement,partly supported by faster local government bond issuance, but contracted for the fourthstraight month.Domestic demand likely remained weak in November, as the gap between the NBSmanufacturing PMI for new orders and new export orders narrowed visibly from the previousmonth. This was in contrast to signs of stronger external demand in November. The NBSmanufacturing PMI for new export orders improved last month compared with October,following the tactical truce reached between President Trump and President Xi at the APECsummit late last month. Similarly, the private RatingDog China Manufacturing PMI painted amixed picture, unexpectedly slipping to 49.9 from 50.6 previously as new orders nearly stalled inNovember. That said, new export orders rose at the fastest pace in eight months, signallingrenewed strength in overseas demand1 .On balance, the contractionary manufacturing PMIs, the marked slowdown in services PMI, andcontinued softness in construction activity point to further weakening in domestic demand.While exports may experience some recovery following the recent trade truce with the US, fluidgeopolitical developments in recent weeks suggest that uncertainty will persist ( see: ChinaOutlook: Geopolitics, property, trade in focus, 28 November 2025). We expect GDP growth toslow from 4.8% y/y in Q3 to close to 4% y/y in Q4.FICC ResearchEconomics1 December 2025Ying Zhang+852 2903 2652ying.zhang3@barclays.comBarclays Bank, Hong KongYingke Zhou+852 2903 2653yingke.zhou@barclays.comBarclays Bank, Hong KongJian Chang+852 2903 2654jian.chang@barclays.comBarclays Bank, Hong KongCompleted: 01-Dec-25, 05:19 GMT Released: 01-Dec-25, 05:23 GMTRestricted - ExternalFIGURE 1. NBS manufacturing PMI contracted for the six monthFIGURE 2. New orders PMI stayed weak48.048.549.049.550.050.551.051.552.0Nov-23May-24Nov-24M