China’s manufacturing and services activity contracted in March for the first time in almost two years, highlighting the economic strains of the government’s strict coronavirus measures.

The official manufacturing PMI, a gauge of factory activity in which a reading of 50 separates monthly expansion from contraction, fell to a five-month low of 49-5. The non-manufacturing PMI dropped to 48.4, its lowest level since August.

The PMI data were released just hours after state media reported that Premier Li Keqiang, head of China’s State Council, was preparing efforts to support economic growth, which has been hit by Covid-19 outbreaks in Shanghai and north-eastern Jilin province.

While the specific measures were not revealed, the State Council noted that 40 percent of this year’s Rmb3.65tn ($575bn) quota for special-purpose bonds — largely used for infrastructure investment — had already been dispersed. It also warned government agencies to refrain from “measures detrimental to the stabilization of market expectations” and to prepare “contingency plans to deal with the possibility of encountering greater uncertainties”.

Zhao Qinghe, senior statistician at the National Bureau of Statistics, said coronavirus outbreaks across China were affecting enterprises. He noted some companies had complained of insufficient personnel owing to the virus and added that a gauge of delivery times was at its lowest level since March 2020, shortly after the pandemic erupted in central China.

The State Council’s pledge marked the second time in as many weeks that the Chinese government had attempted to shore up confidence in the country’s economic outlook.

On March 16, a State Council committee headed by Liu He, President Xi Jinping’s closest economic adviser, made similar pledges in an effort to reassure investors rattled by Covid outbreaks as well as the economic fallout of Russia’s invasion of Ukraine.