China's Oct manufacturing PMI 50.6: S&P Global; 49 in official data

China’s manufacturing sector continued to expand at the start of the final quarter of the year, latest purchasing managers’index (PMI) data by S&P Global.

The headline seasonally-adjusted PMI posted above the 50.0 no-change threshold for a third consecutive month in October to signal an improvement in manufacturing sector conditions. At 50.6, down from 51.2 in September, the latest reading indicated that growth slowed in the latest survey period and was only marginal.

The lower headline index reading was partly due to a less pronounced increase in manufacturing production. The softer rise in output was in turn linked to a slowdown in new order growth in October.

Rising new orders led to higher production, as well as growth in employment, purchasing activity and inventory levels.

New business and output both expanded at weaker rates in October compared to September amid a renewed fall in export orders. Business confidence also slipped to the lowest level in six months, an S&P Global release said.

Chinese manufacturers cut their selling prices at a faster pace in October amid easing cost pressures and greater market competition.

New export orders fell at the quickest pace since May, which was attributed by survey respondents to rising trade uncertainty.

Despite the expansion in workforce capacity, backlogs continued to accumulate. In response to rising production requirements, goods producers lifted their purchasing activity for a fourth consecutive month in October. This in turn led to a further accumulation of stocks of purchases.

Inventories of finished goods similarly increased with higher output in October.

Average input costs continued to rise, albeit at a softer rate than in September. Where prices increased, panellists reported that this was due to higher raw material costs and tighter supply conditions.

Meanwhile, the Chinese government’s official data revealed that the PMI for the manufacturing sector stood at 49 in October—down by 0.8 percentage points from the previous month.

The sub-index for production stood at 49.7—down by 2.2 percentage points from September—indicating a slowdown in manufacturing production. The sub-index for new orders came in at 48.8 in October, down 0.9 percentage points from the month before.