China's Manufacturing Sector Contracts Again; October PMI at 49.3, Below Forecast
Production and new orders both fall below 50
Non-manufacturing also slips into contraction at 49.7
New export orders fall to 48.7
China's manufacturing sector returned to contraction after just one month. Production, new orders and export orders all fell below the 50-point threshold, pointing to a broad slowdown across the manufacturing sector.
According to China's National Bureau of Statistics on October 31, the manufacturing Purchasing Managers' Index (PMI) fell 0.8 points to 49.3 in October from 50.1 the previous month. It also came in below the market forecast of 50.0 compiled by Reuters.
Sub-indices also weakened. The production index fell 1.9 points from the previous month to 49.8, while the new orders index dropped 1.1 points to 49.4. The new export orders index also declined to 48.7 from 50.0 the previous month, indicating weaker export demand.
By company size, the PMI for large enterprises remained in expansionary territory at 50.2, while the indexes for medium-sized and small enterprises fell below the threshold, at 48.4 and 47.5, respectively.
The non-manufacturing sector also slowed. Its business activity index fell 0.5 points to 49.7 in October from 50.2 the previous month, moving into contraction. The index stood at 48.0 for construction and 50.0 for services.
The composite PMI, which combines manufacturing and non-manufacturing, also fell 1.0 point to 49.7 from 50.7 the previous month.
China's manufacturing PMI was below the threshold at 49.2 in July and 49.8 in August, then returned to expansion at 50.1 in September before falling below 50 again just one month later.
The PMI is an indicator of economic trends based on a survey of corporate purchasing managers about new orders, production, employment and inventories. A reading above 50 indicates expansion, while a reading below 50 indicates contraction.
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China's National Bureau of Statistics said the manufacturing PMI fell in October because some demand had been brought forward ahead of the National Day holiday and because of the impact of a complex international environment.
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