China’s Private Manufacturing Index Reaches 52.0 in October Despite Decline in Official Gauge
Key Facts
China’s RatingDog manufacturing index came in at 52.0 points in October, down from 52.1 in September and in line with economists’ expectations, according to Investing.com. The index remained above the 50-point threshold separating expansion from contraction for the eleventh consecutive month. The private survey showed factory output grew at its fastest pace since April, supported by an increase in domestic and overseas orders. The reading ran counter to the official survey, which showed manufacturing contracting in October after returning to expansion in September. The divergence between the two indexes highlights how the picture of industrial activity differs depending on the survey’s scope.
The new orders index in the RatingDog survey fell to 53.3 points in October from 53.4 in September, according to Reuters. It remained above the expansion threshold, alongside the acceleration in output indicated by the private survey. But export orders growth slowed to its lowest level in three months, according to information in a correction to the first draft. Performance varied by goods category: export orders growth slowed among consumer and intermediate goods producers, while it accelerated among capital goods producers. The official new export orders index, meanwhile, fell to 48.7 points in October from 50.0 in September, returning below the expansion threshold.
On the official side, the manufacturing index fell to 49.3 points in October from 50.1 in September, after coming in at 49.8 in August, according to the Associated Press. The National Bureau of Statistics attributed the decline to some orders being brought forward ahead of the National Day holiday and to a complicated and changing international environment. The bureau said, "Some orders were brought forward ahead of the National Day holiday, alongside a complicated and changing international environment." Official data showed a divergence by company size: the index for large companies came in at 50.2 points, compared with 48.4 for medium-sized companies and 47.5 for small companies. Large companies were the only size category mentioned to remain above the expansion threshold.
By contrast, some official sector gauges remained in expansion territory in October. The high-tech manufacturing index came in at 51.3 points, while the equipment manufacturing index was 50.6, according to the National Bureau of Statistics. On prices, the raw materials purchase price index came in at 56.8 points and the selling price index at 51.7. The two indexes fell from September by 4.0 and 2.3 percentage points, respectively, while remaining above 50, the bureau said. It attributed their declines to lower prices for some commodities, including non-ferrous metals.
Weakness in official readings extended to activity outside manufacturing: the non-manufacturing business activity index came in at 49.7 points in October, down 0.5 percentage points from the previous month. The composite output index also came in at 49.7 points, down 1.0 percentage points, according to the National Bureau of Statistics. In markets, the CSI 300 rose 0.4% and the Shanghai Composite gained 0.7% in trading on November 2, according to Investing.com. The yuan held near its highest level against the dollar in more than four years, supported by exporters converting foreign currency earnings into yuan. According to the preliminary and adjustable official release schedule, October consumer and producer price reports are due to be published on November 9 at 9:30 local time.