[News] China’s Manufacturing Sees First Expansion in Nearly Six Months

---

---

China’s manufacturing PMI rebounded into expansion territory, ending a five-month contraction, according to data released by the National Bureau of Statistics on October 31. The October manufacturing PMI reached 50.1, up by 0.3 percentage points from the previous period, exceeding market expectations of 49.9 and signaling an initial recovery in manufacturing activity.

Among sub-indices, all components saw improvements. The production index remained in expansion, rising 1 percentage point to 52, and the new orders index increased from contraction at 49.8 to 50.0. However, inventory, employment, and supplier delivery time indices continued in contraction.

Additional indicators reflected varied conditions, the new export orders index dipped slightly to 47.3, indicating slower global demand, while the producer price index rose 5.9 percentage points to 49.9, reflecting higher raw material costs and a recovery in domestic demand. The raw material purchase price index climbed 8.3 percentage points to 53.4, and the Operation expectations index improved by 2 percentage points to 54.

 

In the non-manufacturing sector, October’s PMI came in at 50.2, up by 0.2 percentage points from the prior period. While most key indices improved, only the input prices index reached expansion, with new orders, sales prices, and employment still in contraction territory.

Industry-specific analysis showed the construction sector’s business activity index declined by 0.3 percentage points from the previous month to 50.4, while services edged up by 0.2 percentage points to 50.1. Transportation, capital market services, and public utility management sectors had business activity indices above 55, whereas accommodation, software and IT services, and real estate sectors remained in contraction.

 

Overall, large-scale equipment upgrades and policies promoting consumer goods replacement are gradually supporting a recovery in manufacturing. Accommodative monetary policies also bolster manufacturing and services to some extent. China’s National People’s Congress Standing Committee is set to convene from November 4 to November 8, and the strength of any new policies released will be crucial for sustaining demand recovery and meeting the 5% annual GDP growth target.