Moves into expansion at 50.3
- expected 49.7, prior 49.3
Summary:
- PMI Growth: Caixin China Manufacturing PMI rose to 50.3 in October, signalling sector expansion.
- Supply and Demand: Both improved, with new orders at their highest since June and output growth steady.
- Inventories: Manufacturers increased purchases and stock levels in response to market recovery.
- External Demand: Export orders remained weak, continuing a three-month contraction.
- Employment: Employment fell for the second month, with widespread job cuts, especially in investment goods sectors.
- Prices: Input and output prices rose slightly due to higher energy and metal costs, ending recent declines.
- Supplier Delays: Persistent delays for the fifth month, with transportation and production struggling to meet demand.
- Business Confidence: Optimism improved, reaching a five-month high, though still below average.
- New Policies: Policies from late September aimed to stabilize demand and foster optimism, though labor market pressure remains.
- Policy Focus: Sustaining growth in 2024 will require boosting consumer demand, with emphasis on increasing household disposable income.
Stimulus announcement began in China in late September and continued through October.
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Earlier this week we had the the official PMIs, showing slight improvement for manufacturing:
China has two primary Purchasing Managers' Index (PMI) surveys - the official PMI released by the National Bureau of Statistics (NBS) and the Caixin China PMI published by the media company Caixin and research firm Markit / S&P Global.
- The official PMI survey covers large and state-owned companies, while the Caixin PMI survey covers small and medium-sized enterprises. As a result, the Caixin PMI is considered to be a more reliable indicator of the performance of China's private sector.
- Another difference between the two surveys is their methodology. The Caixin PMI survey uses a broader sample of companies than the official survey.
- Despite these differences, the two surveys often provide similar readings on China's manufacturing sector.
