Two surveys of economic activity in China’s huge manufacturing and services sectors showed a worrying cooling in October.
The two surveys – from the government’s National Bureau of Statistics showed activity in the services sector hit a three and a half year low last month, while activity in manufacturing hit an eight-month low.
China’s services sector now accounts for around 60% of economic activity (manufacturing and farming the rest). The non-manufacturing PMI covers segments such as retail, aviation, and software, as well as real estate and construction (which showed a rise in activity in the month).
The surveys were weaker than those for September.
(Late next week sees the start of the release of China’s data for October with trade out on Friday and inflation the day after).
China’s official non-manufacturing purchasing managers index dropped to 52.8 in October from 53.7 in September. That’s still expansion (unlike the manufacturing survey).
(A reading above 50 indicates expansion, while a figure below that level suggests contraction).
October’s reading is the lowest since February 2016, when it was 52.7.
A component of the index measuring sentiment among service providers declined to 51.4 this month from 53.0 in September, while a subindex measuring construction activity rose to 60.4 in October from 57.6 in September.
The new-orders subindex for the non-manufacturing sector as a whole increased to 50.5 from 50.1.
China’s official October manufacturing PMI, also released on Thursday, fell to an 8-month low of 49.3 in October from 49.8 in September, staying in contraction territory for the sixth month in a row.
A sub-index measuring total new orders received by manufacturers dipped to 49.6 in October from 50.5 in September.
New export orders also fell to 47.0 from 48.2 in September, while import orders tumbled to 46.9 from 47.1 a month earlier.
Production also eased to 50.8 in October, compared with 51.9 in September.
