China Caixin Manufacturing PMI Returns to Expansion But Labor Market Woes Linger

China GDP Growth 5


Overall, new orders increased at the fastest pace in four months, signaling improved domestic demand.
However, overseas new orders continued to decline, albeit at a lesser pace.
Manufacturing production accelerated because of the increase in new orders.
Firms were more optimistic about the future outlook, with optimism levels at their highest in five months.
Despite the optimism, employment levels fell at the fastest pace in almost 18 months, with manufacturers remaining cautious about costs.
Average input costs increased for the first time in three months due to higher prices for materials.
Selling prices advanced for the first time since June.

The manufacturing sector data comes before next week’s highly anticipated National People’s Congress Standing Committee (NPCSC) meeting. Markets expect new stimulus measures targeting consumption to boost the Chinese economy.

Expert Views on China’s Manufacturing Sector

Dr. Wang Zhe, Senior Economist at Caixin Insight Group, commented on the October Survey, stating,

“In summary, October saw growth in manufacturing supply and demand, increases in prices, proactive inventory replenishment by companies, and logistics delays. Business optimism improved. However, weak external demand and declining employment remained areas of concern.”

Dr. Zhe also commented on the effects of September’s policy measures, saying,

“In late September, China’s Politburo noted emerging challenges in the economy and emphasized the need to focus on key areas and introduce new policies. Following this, a series of new policies were rolled out. Data from the Caixin manufacturing PMI survey show that market demand stabilized and optimism improved, suggesting early signs of policy impact.”

However, employment trends from the Manufacturing PMI survey highlighted China’s labor market woes, which could further impact consumer demand.



This article was originally published by a www.fxempire.com

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