For the third consecutive month, China’s industrial sector has declined as Beijing’s zero-Covid policy has further disrupted logistics and decreased the volume of ocean shipments.
The third consecutive month that the Caixin China General Manufacturing Purchasing Managers’ Index (PMI) has fallen below 50, suggesting a decline in activity, the reading for October was 49.2.
Manufacturing activity was still hampered by Covid-19 outbreaks and the ensuing tightening of prevention and containment procedures, according to Wang Zhe, senior economist at Caixin Insight Group.
“As Covid controls forced company activity and consumer demand down, both output and new orders suffered significant decreases, albeit at a lesser rate. The decline in international demand also persisted, albeit more slowly this time.
Additionally, Caixin reported that delivery performance slightly declined for the fourth consecutive month, with some of the questioned enterprises blaming “low production capacity at vendors, which led to delays.”
For instance, China’s zero-Covid policy is ruining Foxconn, an Apple supplier, in Zhengzhou. Around 200,000 people are employed by the Taiwanese business throughout the “iPhone city” complex in Zhengzhou. However, many people are reportedly escaping “inhumane closed loop” limitations by returning to their hometowns.
For instance, it said that as of October 21, the 14-day average volume of ocean shipments at the port of Shanghai had decreased by 15% since the beginning of the month, while volumes at the port of Shenzhen had decreased by 21% during the same time frame.
Following the Beilun lockout, Ningbo-Zhoushan Port suffered the most, with volumes declining 29%, according to FourKites.
The company continued: “As delays [in China] continue to rise, FourKites has also observed a decrease in the volume of shipments transiting from China to the US over the previous month.
“As of 21 October, the overall 14-day average shipment volume for shipments traveling on this lane is down 17% from the beginning of the month.
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