(Bloomberg) — China’s manufacturing activity contracted in November, according to official and private surveys, as stronger demand overseas after a trade truce with the US failed to reverse a deepening slowdown in the economy.

Despite a surge in new export orders, the RatingDog China manufacturing purchasing managers’ index unexpectedly slumped to 49.9, according to a statement released on Monday, falling below the 50 mark that separates growth and contraction for the first time in four months.

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A day earlier, the National Bureau of Statistics said the official manufacturing PMI remained in contraction for an eighth month, improving slightly but extending its streak of declines to a record. Among the major components, the new export order sub-index rose the most.

Offsetting the pull of improving sales abroad, stalling demand at home and distress in the housing market are pushing the economy toward its slowest expansion since the final three months of 2022, when the nation was nearing the end of its Covid Zero lockdowns. The non-manufacturing measure of activity in construction and services contracted in November for the first time in nearly three years, according to the NBS.

“Although new export orders picked up in November, this trend failed to reverse the sluggish state of the manufacturing sector,” Yao Yu, founder of RatingDog, said in the statement. “Considering the need to sprint toward the annual 5% growth target, there may be strengthened efforts on both the supply and demand sides at the end of the year.”

The PMI results marked a rare case of both the private and official surveys — which cover different sample sizes, locations and business types — simultaneously signaling a contraction in manufacturing. The private poll focuses on small and export-oriented firms, and its findings have tended to be more upbeat for much of this year.

The assessments add to a picture of an economy suffering a loss of momentum this quarter, with investment in an unprecedented decline and consumer demand still sluggish. But tensions with the US have eased after a temporary truce reached weeks ago following a meeting in South Korea between Presidents Donald Trump and Xi Jinping.

China’s annual growth target of around 5% is within reach, especially after the government already injected additional stimulus worth 1 trillion yuan ($141 billion) since late September.

When the standoff with the Trump administration escalated in October, Chinese exports unexpectedly contracted as global demand failed to offset the slump in shipments to the US. Chinese industrial enterprises saw their earnings drop in October for the first time in three months.

Key details of the deal with the US, including questions over Chinese shipments of rare earths, are still being negotiated, underscoring the fragility of the agreement. A diplomatic spat with Japan in recent weeks has added to trade uncertainty, as China contemplates economic countermeasures.

What Bloomberg Economics Says…

“The pace at which the economy is losing momentum heading into year-end is concerning, even though China will probably still meet its 5% full-year growth goal. Still, the government is more likely to start delivering meaningful support in early 2026, rather than in the remaining weeks of 2025..”

— Chang Shu and David Qu. For full analysis, click here

Weak domestic demand is also casting a pall over the outlook for Chinese factories. Growth in retail sales slowed for the fifth straight month in October, the longest such streak since the country shuttered shops because of the Covid pandemic more than four years ago.

The RatingDog survey showed manufacturers decreased their staffing levels as new orders almost stalled, though business confidence improved from October. Their stocks of purchases dropped at the quickest pace since December 2023, falling for the first time in seven months.

“Both the NBS and RatingDog manufacturing PMIs were below 50 in November, indicating slower manufacturing activity,” Goldman Sachs Group Inc. economists led by Yuting Yang said in a note.

The two surveys also “suggest narrower profit margins,” they said, since the input price index of both remained above 50, while their measure of output costs fell.

The recent downswing in the economy means questions about additional stimulus measures will probably be high on the agenda of the Central Economic Work Conference, a key gathering of officials in December that will offer clues about the path of policy next year.

China’s central bank will “most likely” wait until January to resume its cuts to the policy interest rate and the reserve requirement ratio, according to Citigroup Inc. It’s also possible that the Ministry of Finance will front-load next year’s government bond issuance and subsidies for consumers, it said.

After the work conference, there could “be a window for a new round of incremental property support,” Citi economists including Yu Xiangrong wrote in a note. “Yet we still don’t expect the central government to step in with its own balance sheet.”

–With assistance from Yujing Liu.

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