BEIJING (Reuters – China’s factory activities contracted again in November, as lower demand, shrinking jobs and higher prices weighed down on manufacturers, a Wednesday business survey revealed.

Caixin/Markit Manufacturing Purchasing Management Index (PMI), which was 50.6 in October, fell to 49.9 in December, compared with analyst expectations of 50.5 according to Reuters. On a monthly basis, the 50-mark distinguishes between growth and contraction.

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

Analysts predict that the slowdown of gross domestic product (GDP), which was seen in the third quarter, will continue into the fourth quarter. Demand is expected to be soft due to the ongoing global COVID-19 pandemic.

Contrary to the findings of the official Tuesday survey which showed manufacturing activity increasing for the first three months in a row, the results from the private survey focuses on smaller firms located in the coast regions.

The manufacturing sector saw a recovery in supply, but the demand was down. The pace of production recovery was accelerated by the removal of supply-side constraints and the end of the power crisis,” Wang Zhe, senior economist with Caixin, stated in the accompanying data release.

But demand was still relatively low, suppressed due to the COVID-19 outbreak and increasing product prices.

The Caixin survey revealed that November saw an increase in production, but new orders fell back to contraction.

The declines in employment have also been quite severe.

The government’s efforts to limit record-high raw materials prices are paying off, and cost pressures have begun to ease.

The sub-index of input prices fell to 52.3, from 65.1 in the month before. This led to a slower pace in inflation.

The survey revealed that steel prices dropped sharply at the firms’ expense in November while prices of electronics and chemicals remained elevated.

Caixin Insight Group’s Wang urged policymakers not to forget about small businesses and to pay more attention to issues like deteriorating job prospects, low household income growth, and poor purchasing power for goods.

“In addition, prices for some raw materials have remained high. High cost pressures continue to be a problem for enterprises. Inflation should be taken seriously by policymakers.