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China’s manufacturing activity surprisingly contracts in October, ‘bumpy road’ ahead for economy

  • Official manufacturing purchasing managers’ index fell to 49.5 in October, down from 50.2 in September
  • The non-manufacturing PMI stood at 50.6 in October, compared to 51.7 in September

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China’s non-manufacturing purchasing managers’ index (PMI) stood at 50.6 in October, compared to 51.7 in September. Photo: AFP
Luna Sunin Beijing

A pivotal gauge of China’s manufacturing activity reported a surprising contraction in October, the product of a high baseline for the previous month and ongoing jitters over the state of the country’s property market.

The unforeseen dip, analysts said, shows enduring uncertainty over the country’s economic recovery and adds credence to persistent calls for greater policy support.

The official manufacturing purchasing managers’ index (PMI) fell to 49.5 in October, down from 50.2 in September, the National Bureau of Statistics said on Tuesday.

Meanwhile, the non-manufacturing PMI stood at 50.6 in October, compared to 51.7 in September.

The readings were lower than market expectations, with the average economist’s estimate from Chinese data provider Wind predicting a slight fall to 50.1 but still staying in the expansionary range. A PMI higher than 50 typically indicates expansion of activity, while an index below 50 denotes a contraction for the period surveyed.

“The unexpected decline of manufacturing PMI shows recovery in China is a bumpy road, as domestic demand is still quite weak,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

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