China's factories contract again as purchasing managers' index falls to 49.3
China's official purchasing managers' index for manufacturing fell to 49.3 in October – below the 50 mark separating growth from contraction and below economists' expectations.
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Activity in China's manufacturing sector contracted in October at the fastest pace in three months. The official purchasing managers' index (PMI), released on Saturday by the National Bureau of Statistics, fell to 49.3 from 50.1 in September. Readings below 50 indicate contraction. Economists polled by Reuters had expected 50.0, while according to Bloomberg the median forecast was 49.9.
The weakness spans demand and supply: according to Bloomberg, the new-orders sub-index fell to 49.4 and the production gauge to 49.8. Large companies stayed in expansion territory at 50.2, while medium-sized (48.4) and small firms (47.5) contracted. The non-manufacturing index, covering services and construction, was also below 50 at 49.7. High-tech manufacturers, however, continued to grow.
"Insufficient demand is increasing downward pressure on the economy," said Zhang Liqun, an analyst at the China Federation of Logistics & Purchasing, according to Reuters. China's economy grew 4.5% in the third quarter. Beijing has set a growth target of 4.5% to 5% for 2026.