A private gauge of China’s factory activity fell into contraction in October, suggesting continued economic headwinds despite Beijing’s recent efforts to shore up growth.
The Caixin manufacturing purchasing managers index fell to 49.5 in October from 50.6 in September, falling into contractionary territory for the first time in three months, according to data released Wednesday by Caixin Media Co. and S&P Global. The 50-mark separates expansion from contraction.
Total new orders increased for the third consecutive month, but the pace of growth slowed for two months in a row, according to Caixin.
External demand continued to decline, with new export orders falling for a fourth straight month, said Caixin. The employment subindex, which was in negative territory for the seventh time in eight months, hit its lowest point since May as manufacturers cut jobs.
“Business optimism continued to decline, with the corresponding gauge hitting the lowest since September last year despite remaining in expansionary territory,” said Wang Zhe, senior economist at Caixin Insight Group, adding that businesses were concerned about the global economic outlook in the coming year.
The Caixin index pointed in the same direction as a competing official gauge. China’s official manufacturing purchasing managers’ index unexpectedly fell to 49.5 in October from 50.2 in September, the National Bureau of Statistics said Tuesday.