China: Manufacturing PMI falls to an over two-year low in October
The manufacturing purchasing managers’ index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) inched down to an over two-year low of 50.2% in October from 50.8% in September. The print came in above market expectations of a fall to 49.9%. Consequently, the index edged closer to the 50% threshold that separates expansion from contraction in the manufacturing sector, where it has been for more than two years.
The deterioration in manufacturing conditions was almost across-the-board in October. New orders increased at the weakest pace since July 2016, while output growth also slowed notably. Moreover, new export orders, a proxy for future activity, tumbled to a near three-year low, dampened by the trade row with the U.S. Job losses deepened and stocks of inventories continued to decline in October, albeit to a softer degree than in September. The one bright spot of the report was supplier delivery times, which improved slightly in the month. Input price inflation softened in October but remained elevated due to higher commodity prices.