China’s Manufacturing PMI Falls to 49.3 in October as Orders Weaken

China’s official manufacturing purchasing managers’ index fell to 49.3 in October from 50.1 in September, according to figures released on October 31 by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. The decline reversed September’s move above the 50 threshold. A reading below that level signals a contraction in activity compared with the preceding month, rather than a percentage fall in output. Production and demand both weakened. The production index dropped to 49.8 from 51.7, while new orders declined to 49.4 from 50.5. New export orders slipped to 48.7 from 50.0. Huo Lihui, chief statistician at the bureau’s Service Industry Survey Center, said, “Both supply and demand slowed.” Huo attributed the manufacturing decline partly to demand brought forward before the National Day holiday and a complex, changing international environment. The results differed by company size and industry. Large manufacturers remained above the expansion threshold with an index of 50.2, while medium-sized companies registered 48.4 and small businesses 47.5. High-tech manufacturing and equipment manufacturing also stayed in expansion, with readings of 51.3 and 50.6 respectively, according to Huo’s assessment. The broader nonmanufacturing business activity index fell to 49.7 from 50.2. Services recorded 50.0 and construction 48.0, while the composite output index stood at 49.7. The bureau said its manufacturing survey covers 3,200 businesses across 31 industry categories. The published indexes are seasonally adjusted; they describe the direction of monthly business conditions rather than measuring gross domestic product.