China's manufacturing Purchasing Manager's Index (PMI) dipped to its lowest in three years.

BBC reports that in November, the official PMI reading went down to 49.6. This is lower than October's 49.8 rating. This data comes from the National Bureau of Statistics.

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A reading below 50 indicates contraction, while readings above 50 indicate expansion.

This reading is the latest in a straight four-month contraction, despite measures to boost economic growth. To date, the government has cut interest rates six times and has fast-tracked investment approvals that will allow for new building projects and factory plants.

The manufacturing industry has been a driving force for China's economic growth for decades, and as the economy slows down, factories are having a hard time keeping up and gaining momentum.

Years ago, China became known as the world's workshop, able to churn out millions of cheap goods at record-breaking speed. As the manufacturing industry grew, more workers received better income levels, paving the way for a middle class to be birthed.

However, demand for Chinese-made goods have been in decline, and this has led to a slowdown in the manufacturing sector.

Bloomberg reports that the steel sector has an even worse scenario, with a low PMI reading of 37.

Liu Li-Gang, Head of China economics for Australia & New Zealand Banking Group Ltd. in Hong Kong, said that China's steel sector suffers from “overcapacity pressures” and declining demand.

CNBC reports that on the other hand, the services sector is booming.

The current official PMI reading for the services sector is 53.6, a bit higher than the previous month's 53.1

This indicates that the Chinese economy is shifting more into a consumer-based economy than an export-driven one.

Julian Evans-Pritchard, China economist for Capital Economics, said that although foreign demand still weighs on China's manufacturing sector, the rest of the country's economy seems to do “reasonably well.”

TagsChina Manufacturing PMI, China steel industry