China’s manufacturing sector contracted in November, marking the first decline since February 2009, according to government figures.

The official purchasing managers’ index (PMI) fell to 49.0 in November from 50.4 in October, according to the National Bureau of Statistics. A reading of more than 50 signals expansion while a reading below 50 means the sector contracted.

In a surprise move that was clearly timed to offset the negative impact of Thursday’s PMI number, China’s central bank kicked off a new round of monetary easing on Wednesday evening by announcing a cut in the reserve ratio for banks for the first time in three years.

By reducing the amount of deposits banks must hold on reserve by 0.5 percentage points, the central bank effectively injected around Rmb400bn ($63bn) into the banking system so that lenders could extend more credit to the slowing economy.

“The markets have been handed a powerful one-two combo, in the form of a shocking PMI print and an aggressive RRR cut,” said Alistair Thornton, China analyst at IHS Global Insight. “The message is clear: the economy is slowing much faster than expected and the government has stepped into the ring.”

Most analysts did not expect monetary easing to begin until the first quarter of next year at the earliest but Beijing is facing the prospect of a stall in its two major engines of growth – exports and real estate.

Policymakers are now more concerned about supporting growth than tackling inflation and are expected to announce more monetary loosening measures in the coming months.

That reverses two years of gradual monetary tightening in which the government has been trying to cool growth and rein in persistently high price increases in a campaign that appears to have been largely successful.

JPMorgan analysts said they expect consumer inflation to be about 4.5 per cent in November, down from 5.5 per cent in October and well below the peak of 6.5 per cent in July. The input prices sub-index of November’s official PMI, an indicator of inflationary pressure, supported that forecast, declining to 44.4 from 46.2 in October.

But pulling down inflation has come at the cost of a steeper than expected drop in growth. In a sign that the economy is likely to slow even more in the coming months, the new orders sub-index fell 2.7 points to 47.8, while the new export orders sub-index dropped 3 points to 45.6.

Meanwhile, real estate sales volumes have dropped sharply across the country and more than halved from a year earlier in some major cities while prices have also started to decline.

Although construction growth in the country has held up until now, most property developers appear to be delaying new projects, raising the prospect of a halt in housing construction that could be devastating for the wider economy.

Real estate construction accounted for about a quarter of all investment in China last year and around 13 per cent of GDP.