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China’s factory activity returned to contraction in October after a brief expansion in September, with the official manufacturing PMI falling to 49.2 last month, from 50.1% in previous month, according to data released by the National Bureau of Statistics on Monday.
Both production and demand weakened last month, with the sub-index for production falling by 1.9 percentage point to 49.6, entering the contractionary territory again, while the sub-index for new orders dropping by 1.7 percentage point to 48.1, contracting for the fourth consecutive months, showed the data.
The sub-index for new export orders rose by 0.6 percentage points to 47.6, remaining in contraction.
By sectors, production and new orders sub-indexes for the sectors including agriculture good and food processing, oil, coal and other fuel processing, drug-making and automobile manufacturing remained in expansionary territory for the second straight month, while those for textile, wood processing, furniture manufacturing, etc fell by more than 5 percentage points last month, showed the data.
The weakening production and demand has dampened factories’ recruitment, with the sub-index falling by 0.7 percentage point to 48.3, remaining in contraction since April 2021.
Driven by price rises of some commodities in the international market, the sub-index for manufacturers’ material purchase prices rose by 2 percentage points to 53.3, the highest since June this year and remaining in expansionary territory for the second straight month.
The higher material prices have been partially passed on to product prices, with the sub-index for products’ factory-gate prices rising by 1.6 percentage point to 48.7, though remained in the contractionary zone.
As many Chinese regions experienced Covid flare-ups in October, disruptions to logistics and supply chain worsened last month, with the sub-index for suppliers’ delivery time falling by 1.6 percentage point to 47.1, remaining in contraction for the third month in a row.
The weakened activities also dampened manufacturers’ business expectations, with the sub-index falling by 0.8 percentage point to 52.6.
Large companies continued to outperform smaller ones, with largest companies’ PMI falling by 1 percentage point to 50.1, while that for medium- and small-sized companies falling by 0.8 and 0.1 percentage point, respectively, to 48.9 and 48.2.
The Covid resurgence and epidemic control measures also disrupted activities in China’s non-manufacturing sectors. The official non-manufacturing PMI, which covers services and construction activities, dropped to 48.7 last month, compared to 50.6 in the previous month, showed the data, slipped into contraction for the first time in five months.
In breakdown, the PMI for the services sector fell by 1.9 percentage points to 47, indicating that services activities contracted at a faster pace in October. In particular, the sub-index for the industries including retails, road transportation, flight transportation, hospitality, catering and commercial service all below 45.
The PMI for the construction activities fell by 2 percentage points to 58.2, showed the data.
China’s official composite PMI, which covers both manufacturing and non-manufacturing activities, fell to 49 in October, compared to 50.9 in the previous month, said the NBS.
