China manufacturing PMI falls to 49.3 and returns to contraction
China's manufacturing PMI fell to 49.3 in October from 50.1, returning to contraction and missing expectations of 50, as output and new orders declined.
China's official manufacturing purchasing managers' index fell to 49.3 in October from 50.1 in September, returning to contraction below the 50 mark, according to data from the National Bureau of Statistics.
The bureau said the production index fell to 49.8 from 51.7, the new orders index dropped to 49.4 from 50.5, and the new export orders index declined to 48.7 from 50.0.
NBS statistician Huo Lihui noted that part of the decline reflects demand pulled forward before the National Day holiday and a volatile global environment. Analysts had expected a reading of 50.0, and the index is at its lowest since July.
By contrast, the high-tech manufacturing index held at 51.3, the equipment manufacturing index reached 50.6, and the production and business expectations index stood at 53.4. The non-manufacturing index fell to 49.7 from 50.2, while the services index held at 50.0, and the composite index dropped to 49.7 from 50.7.
What do these terms mean?
Purchasing managers' index (PMI): A monthly index based on a survey of company managers that measures manufacturing or services activity. A reading above 50 means expansion, and below 50 means contraction.
New orders: A sub-index that measures the volume of orders factories receive from customers, used to anticipate output in the coming months.
Composite index: A measure that combines manufacturing, services and construction activity into a single number to give a broader picture of China's economy.
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