China manufacturing growth slows in October as export orders fall

Investing.com -- China’s manufacturing sector continued to expand in October, but at a slower pace as export orders declined amid rising trade uncertainty, according to the latest RatingDog China Manufacturing PMI data.

The headline Purchasing Managers’ Index fell to 50.6 in October from 51.2 in September, marking the third consecutive month above the 50.0 threshold that separates growth from contraction, but indicating only marginal expansion.

Manufacturing production increased at a softer pace, linked to slower new order growth. While domestic demand and sales promotions supported a fifth consecutive monthly rise in new business, subdued external demand dampened overall growth. New export orders fell at the quickest pace since May, which survey respondents attributed to rising trade uncertainty.

The employment index returned to expansion territory for the first time since March, showing the highest reading since August 2023. Manufacturers reported hiring additional workers to cope with existing workloads, though backlogs continued to accumulate.

On the price front, manufacturers cut their selling prices at a faster pace in October amid easing cost pressures and greater market competition. Output charges fell for the second consecutive month and at the most pronounced pace since July, while challenging external demand conditions led producers to lower export charges for the first time since April.

"Among the sub-indices, only employment showed a positive month-on-month change, while all other indicators declined to varying degrees," said Yao Yu, Founder at RatingDog. "Recently, China’s main policy focus has shifted to the ’15th Five-Year Plan.’ Subsequent policies to stabilize the economy and boost domestic demand may be introduced, potentially providing some future support for the PMI index."

Business confidence slipped to the lowest level in six months, though sentiment remained positive overall due to hopes that new product development and business expansion plans would boost sales in the next 12 months.

Purchasing activity increased for a fourth consecutive month, leading to further accumulation of raw materials and finished goods inventories, though the rates of accumulation slowed compared to September.

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