China's factory activity shrinks in October, third contraction in four months
SPY•China's official manufacturing PMI fell to 49.3 in October from 50.1 in September, while the non-manufacturing PMI dropped to 49.7 from 50.2. New orders and new export orders remained in contraction territory.
1. Factory activity contracts
China's factory activity contracted for a third time in four months in October as demand at home weakened and export orders cooled. The official manufacturing PMI fell to 49.3 from 50.1 in September, below the 50.0 forecast; production and purchasing activity also moved into contraction.
2. Economists call for support
Zhang Liqun said insufficient demand was increasing downward pressure on the economy. Zhang Zhiwei said China would need more significant policy support to boost domestic demand if external demand weakens in 2027, while Lu Zhe called for expanded subsidies for mortgage interest payments and investment-project loans.
3. Uneven sector performance
The non-manufacturing PMI, covering services and construction, fell to 49.7 from 50.2. Railway, shipbuilding, aerospace equipment, and computer, communications and electronics manufacturing had production and new orders readings of 53.0 or higher. Third-quarter net profit nearly tripled at Zhongji Innolight and plunged 80% at Oppein Home.
