BEIJING, (Reuters) – China’s manufacturing activity unexpectedly grew in November. This was due to a drop in raw materials prices and an abated power rationing. The result is putting some pressure on a sector that has been struggling with soft demand.

According to data provided by the National Bureau of Statistics on Tuesday, the official manufacturing Purchasing Manager’s Index was 50.1 in November. This is up from 49.2 October.

This is the mark that separates growth and contraction. Analysts expected it would be 49.6.

The second-largest country in the world has suffered a dramatic rebound after last year’s pandemic. It now faces a slower manufacturing sector, debt issues in its property market, and COVID-19 infections.

Analysts predict a slower fourth-quarter growth in gross domestic products (GDP) after a 4.9% increase in GDP year-over-year.

The positive news headline PMI reflected in the subindex production rose from 48.4 to 52.0 October to reflect the increase. It was due to lower power rationing as well as the decline in raw material prices.

The pace of new orders was also slower, but November saw the fourth consecutive month of declining customer demand.

The sub-index of input prices was 52.9 in November. This is a significant decrease from the 72.1 recorded in October.

The factory gate inflation reached an all-time high of 26 years in October. It further squeezed profit margins for the producers and increased stagflation fears. According to policy sources, China’s central banks will be cautious in loosening its monetary policy to boost the economy.

China’s Premier Li Keqiang admitted last week that China’s economy was facing downward pressures, but suggested authorities avoid an aggressive “one-size-fits all” approach.

As China raced for control, the official PMI of non-manufacturing fell to 52.3 in November from 52.4 in Oct.

China’s composite October PMI was 52.2. It includes both manufacturing and service activity.