China factory activity growth slows in October as orders and output ease

China's manufacturing sector expanded at a slower pace in October amid a less pronounced increase in production and a slowdown in new orders, S&P Global reported Monday.

The RatingDog China general manufacturing purchasing managers' index fell to 50.6 in October, down from 51.2 in September, missing the 50.9 FXStreet-cited consensus forecast.

A reading above the 50.0 neutral mark indicates an overall increase in month-on-month business activity, while a reading below signals a contraction.

S&P Global noted that among the sub-indices, only employment showed a month-on-month improvement, while all other indicators weakened to varying extents.

"On a sub-index basis, the expansion of both demand and production slowed in October. On the demand side, heightened trade uncertainty in October caused new export orders to fall sharply into contraction territory, dragging down the new orders reading. Market concerns about weakening exports persisted. On the production side, uncertainty in the external environment also dampened output growth. Although production-related sub-indices declined month-on-month, they all remained in expansion territory," said Yao Yu, founder of RatingDog.

"Recently, China's main policy focus has shifted to the 15th Five-Year Plan. Subsequent policies to stabilise the economy and boost domestic demand may be introduced, potentially providing some future support for the PMI index."

S&P Global compiles the monthly PMI based on survey responses from a panel of approximately 650 manufacturers, spanning both private and state-owned firms.