According to the Caixin survey, virus outbreak and subdued market conditions continued to weigh on customer demand and factory operations in the country. Companies have said that staff resignations and absences due to COVID infections have weighed on the headcount. Insufficient staffing contributed to a renewed upturn in backlogs of work.
While some have said that the rollback of virus containment measures had helped to ease the strain, it is a common consensus that supply chains and logistics had yet to recover fully.
The ruling party had dropped quarantine, testing and other restrictions and eased controls that blocked most travel into and out of China. To shore up the economy, the ruling party had backtracked on key financial and industrial policies.
The World Bank has earlier this month cut it 2023 growth outlook for China to 4.3 percent from a forecast in June of 5.2 percent. It cited uncertainty about COVID-19 and the weak real estate industry.
In December, the Chinese manufacturing contracted for a third consecutive, in the biggest drop since early 2020, as the country battles a nationwide COVID-19 surge after suddenly easing anti-epidemic measures.
