China Manufacturing Activity Contracts On Falling Production
01 November 2023 - 3:23AM
RTTF2
China's manufacturing activity contracted in October as firms
reported a fresh decline in production amid weak foreign demand,
survey results released by S&P Global showed on Wednesday. The
Caixin manufacturing Purchasing Managers' Index dropped to 49.5 in
October from 50.6 in the previous month. The sector contracted for
the first time since July.
There was a renewed fall in manufacturing production in October.
Although moderate, the decrease contrasted with modest growth in
the previous two months.
At the same time, new orders increased only marginally. Sluggish
global economic conditions and high prices dampened sales. Export
orders declined for the fourth straight month.
Lower production as well as muted client demand weighed on
purchasing activity. Firms relied on current stock to offset the
rising costs. On the other hand, weaker-than-expected sales and the
delayed shipment of goods led to the sharpest growth in inventories
of postproduction items since September 2015.
The survey showed that average delivery times for purchased
inputs improved slightly in October.
Manufacturers' reduced their staffing levels at the quickest
pace since May. Softer customer demand and efforts to reduce costs
led firms to readjust their workforce numbers.
Regarding prices, the survey showed that input prices grew at
the fastest rate since January. Greater operating expenses were
partly passed on to clients.
Business sentiment hit its lowest level since September 2022 due
to the sluggish global economic climate.
"The economy has showed signs of bottoming out, but the
foundation of recovery is not solid," Wang Zhe, a senior economist
at Caixin Insight Group said. "Demand is weak, many internal and
external uncertainties remain, and expectations are still
relatively weak."
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