China Manufacturing PMI Falls to 49.3 in October Signaling Factory Contraction

China's factory activity dipped back into contraction in October following a brief rebound in September, according to survey figures released by the National Bureau of Statistics (NBS) and reported by News of Bahrain. The official manufacturing purchasing managers' index (PMI) fell 0.8 points to 49.3, dropping below the 50-point threshold that divides monthly growth from contraction.

The contraction was driven by simultaneous softening in production and demand. The production sub-index declined 1.9 points to 49.8, while the new orders sub-index decreased 1.1 points to 49.4. Demand from overseas markets also contracted, with the new export orders sub-index falling to 48.7 from 50.0 in September. NBS chief statistician Huo Lihui attributed the weaker reading partly to demand pulled forward ahead of the National Day holiday and a complex external international environment.

Performance diverged sharply across company sizes and industrial sectors. The PMI for large enterprises stood at 50.2, maintaining growth territory, whereas medium-sized and small enterprises fell further into contraction at 48.4 and 47.5, respectively. Advanced sectors remained resilient, with high-tech manufacturing recording 51.3 and equipment manufacturing registering 50.6.

Broader economic indicators also showed moderating activity. The non-manufacturing business activity index, tracking construction and services, declined to 49.7 from 50.2 in September, while the composite PMI output index fell 1.0 point to 49.7.