A recent private gauge of China’s factory activity shows a contraction in October, suggesting ongoing economic challenges despite efforts by Beijing to boost growth.
The Caixin manufacturing purchasing managers index (PMI) dropped to 49.5 in October from 50.6 in September, marking the first contraction in three months, according to data released by Caixin Media Co. and S&P Global. The 50-mark separates expansion from contraction.
Although total new orders saw growth for the third consecutive month, the pace of that growth has slowed for two months in a row, as reported by Caixin.
Meanwhile, external demand remained in decline, with new export orders falling for the fourth straight month. Additionally, the employment subindex reached its lowest point since May as manufacturers continued to cut jobs.
Despite being in expansionary territory, business optimism has also declined, hitting its lowest level since September last year. Wang Zhe, senior economist at Caixin Insight Group, noted that businesses were apprehensive about the global economic outlook for the upcoming year.
It is worth noting that the Caixin index aligns with another official gauge. China’s official manufacturing PMI unexpectedly fell to 49.5 in October from 50.2 in September, according to the National Bureau of Statistics.
