The seasonally adjusted headline PMI was above the unchanged threshold of 50.0 for the third consecutive month in October, indicating an improvement in manufacturing sector conditions. The latest reading, 50.6, down from 51.2 in September, indicated growth slowed in the latest survey period and was only marginal.
China’s manufacturing sector continued to expand at the start of the final quarter of the year, the latest PMI data from S&P Global shows. The latest reading, 50.6, down from 51.2 in September, indicated growth slowed in the latest survey period and was only marginal. Meanwhile, official Chinese government data revealed that the manufacturing PMI stood at 49 for the month, down 0.8 percentage points from September.
The lower headline index reading was partly due to a less pronounced rise in manufacturing production. The softer rise in production was in turn linked to a slowdown in new order growth in October.
The increase in new orders led to higher production, as well as growth in employment, purchasing activity and inventory levels.
Both new orders and production expanded at a weaker pace in October compared to September amid a fresh drop in export orders. Business confidence also fell to the lowest level in six months, according to a statement from S&P Global.
Chinese manufacturers reduced their selling prices at a faster pace in October amid easing cost pressures and increased competition in the market.
New export orders fell at the fastest pace since May, which respondents attributed to growing trade uncertainty.
Despite the expansion of workforce capacity, backlogs continued to accumulate. In response to growing production needs, goods producers increased their purchasing activity for the fourth consecutive month in October. This, in turn, led to a further accumulation of purchasing stocks.
Finished goods inventories also increased with higher production in October.
Average input costs continued to rise, although at a slower pace than in September. When prices increased, panelists reported that this was due to rising raw material costs and tighter supply conditions.
Meanwhile, official Chinese government data revealed that the PMI for the manufacturing sector stood at 49 in October, down 0.8 percentage points from the previous month.
The production subindex stood at 49.7 (2.2 percentage points lower than in September), indicating a slowdown in manufacturing production. The new orders subindex stood at 48.8 in October, down 0.9 percentage points from the previous month.
Fiber2Fashion News Desk (DS)
