BEIJING: China’s manufacturing activity unexpectedly contracted in October, an official factory survey showed on Tuesday (Oct 31), underlining the challenge facing policymakers trying to engineer a durable economic recovery.
Recent indicators pointed to encouraging signs of stabilising in the world’s second-largest economy, supported by a flurry of policy support measures, although a protracted property crisis and soft global demand remain major headwinds.
The official purchasing managers’ index (PMI) fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion, and missing a forecast of 50.2, data from the National Bureau of Statistics showed.
The non-manufacturing PMI also fell to 50.6 last from 51.7 in September, indicating a slowdown in activity in the vast service sector and construction.
“The weak PMI data may reflect some of the weakness in demand related to the housing slump and a slowdown in infrastructure spending,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
“Although there are signs of exports bottoming out, a strong recovery in external demand is probably elusive,” he added.
Both new export and import orders shrank for an eighth consecutive month, suggesting that manufacturers were struggling for buyers overseas and ordering fewer components used in finished goods for re-export.
Source: CNA
