Manufacturing PMI for October drops to 49.2

China's Manufacturing Sector Expands Marginally

Manufacturing growth slows in October - PMI

Civil engineering grew at the strongest pace since July of past year, offsetting the weakest growth in house building and commercial construction in seven and five months respectively. The overall volume of inputs purchased continued to rise in October, but at the slowest rate in seven months.

Volumes of new work from overseas also rose, albeit at the softest rate for three months.

That encouraged firms to raise output at the fastest pace in four months, which helped increase hiring to the highest pace this year.

The manufacturing supplier delivery time index grew faster to 56.4 points, while the sector's inventories index also grew for the nineteenth consecutive month to 56.2 points, the index grew at a faster rate when compared to its level in the previous month. The latest figure means that the manufacturing sector activity increased very slightly in October but remained at a very low level.

Some companies linked slowing demand for new orders from the European Union to Brexit uncertainties, while others focused more attention on rising global trade tensions and weaker demand from the world auto sector.

"Foreign demand decreased for the second time in the past three months during October".

"Aside from the demand-side impact of the SST, there were reports of general underlying market weakness hampering new business growth, which restricted the extent to which firms were passing through higher cost burdens to clients", he said.

Private sector firms in all sectors account for 60 per cent of Chinese economic activity and 80 per cent of employment.

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The deterioration in operating conditions was largely driven by a marked reduction in total new sales, it said.

Greater production requirements also drove a first monthly rise in input buying since April.

Firms highlighted increased fuel, labour, timber and steel costs.

"Alongside the halt in hiring, the increasingly defensive position of United Kingdom manufacturers was also reflected in the slight decreases in purchasing activity and inventory holdings, which firms linked to protecting cash flow and cost-cutting".

The sub-index measuring new orders fell to 55.5 from 57.3 in September, and 60.3 in August.

Anxiety about China's cooling growth and its likely drag on the global economy have vexed financial markets recently, and Wednesday's official Purchasing Managers' Index (PMI) indicates more stress for investors through coming months. The overall level of positivity was at a 20-month low.

"Growing risk aversion, linked in turn to worries about the global economic environment, trade-war worries, political uncertainty and rising prices appears to be hitting demand for a wide variety of goods", said Chris Williamson, chief business economist at IHS Markit.

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