Activity in China’s manufacturing industry grew in October for the third consecutive month, at a slower pace than in September, according to the purchasing managers’ index (PMI, the sector’s benchmark indicator) released this Monday, November 3, by the consultancy RatingDog.
This indicator, prepared by the risk analysis agency Standard & Poor’s (S&P) and which many international investors take as a reference to analyze the Chinese manufacturing sector, slowed from 51.2 points in September to 50.6 in the month that just ended.
When measuring the PMI, a mark above 50 points represents an expansion of activity in the sector compared to the previous month, while below this means a contraction.
The data is also below what was expected by analysts, who expected a slowdown in growth, but less pronounced, to around 50.9 units.
The S&P reading is more positive than the official one, released last Friday by the Chinese National Statistics Institute (INE), which pointed to a seventh consecutive month of contraction in industrial activity, placing the PMI at 49 points.
RatingDog founder Yao Yu explained that both demand and supply slowed in October, and that, in both cases, the trade war with the United States was among the main culprits.
“On the demand side, greater commercial uncertainty in October caused new export orders to fall sharply (…). Market fears regarding the weakening of exports remained. On the supply side, uncertainty in the external environment also harmed production growth”, he stated.
Yao clarified that all sub-indices that measure productive activity continue to show positive results, as does the employment index, which follows the evolution of the labor market in the Chinese manufacturing sector, which recorded the highest level since August 2023 in March.
Given the current situation, the Chinese Executive believes that the new five-year plan (2026-2030) recently approved by the Chinese Communist Party “may offer some support in the future” to the PMI, thanks to the promised measures in terms of economic stabilization and boosting domestic demand.