China's factory activity drops amid renewed COVID-19 restrictions

Factory activity in China fell in November following new COVID-19 restrictions that have sparked protests across the country. 

The official factory statistics in China revealed that activity fell to its lowest level since April 2022. The Purchasing Managers Index for November dropped from 49.2 in October to 48, according to the BBC. 

If factory activity falls below the 50-point mark, that is typically an indication of economic contraction rather than growth. Earlier expectations by analysts predicted a dip to only 49, according to Reuters. 

Each PMI reading is sequential and changes from month to month depending on the factory output. Recent COVID-19 restrictions in China have damaged global demand as well as caused civil unrest in the world's second-largest economy. 

Moreover, China's non-manufacturing PMI dropped to its lowest point in seven months, from 48.7 in October to 46.7 in November. This reading represents business sentiment in China's service and construction industry.