In October, China's manufacturing sector experienced notable growth, driven by an uptick in new work orders and increased output. The seasonally adjusted Caixin China purchasing managers index (PMI) climbed to 50.3, surpassing the previous month's figure of 49.3 and crossing the critical threshold of 50 that distinguishes expansion from contraction.
This rise indicates a robust improvement in business activity, as highlighted by the monthly survey conducted by S&P Global. Manufacturers reported a significant increase in incoming new orders, attributed to enhanced underlying demand and ongoing efforts in business development. These factors contributed to the fastest growth in new orders observed in the last four months.
Furthermore, there was an improvement in manufacturer business confidence, marked by a rebound in expectations for future output, which reached its highest level in five months. Despite these positive indicators, challenges remain. Factory managers noted sluggish export orders and did not replace workers who departed, leading to reduced staffing levels in the industrial sector.
Operational costs for manufacturers also rose in October, marking the first increase in three months. The rise in input costs, particularly for metals and energy, prompted manufacturers to adjust their pricing strategies slightly. Additionally, supply chain issues were evident, with disruptions in transportation and production leading to delays in the delivery of supplies to factories, thereby straining supplier capacity.
This nuanced balance of growth and challenges illustrates the complex landscape of China's manufacturing sector in October. The Caixin China manufacturing PMI is derived from responses provided by 650 manufacturers, encompassing both private and state-owned entities, during the period spanning October 10 to October 23.
This report aligns with a related manufacturing PMI release by Beijing, which recorded a seasonally adjusted figure of 50.1 for October, an improvement from 49.8 in September, as noted by the National Bureau of Statistics (NBS)..