China’s manufacturing activity expanded less than forecast in October, a private survey showed, adding to worrying signs about the economy’s momentum as the year winds down.
The RatingDog China General Manufacturing Purchasing Managers’ Index slipped to 50.6 from 51.2 in September, according to a statement released on Monday, staying just above the 50 mark that divides expansion from contraction. The median forecast of economists surveyed by Bloomberg was 50.7.
New export orders dropped at the quickest pace since May, the PMI report showed, with goods producers turning the least optimistic in six months. A long national holiday in October might have exaggerated the extent of the slowdown.
“Heightened trade uncertainty in October caused new export orders to fall sharply into contraction territory,” Yao Yu, founder at RatingDog, said in the statement. “On the production side, uncertainty in the external environment also dampened output growth.”
Tensions between the world’s largest economies escalated in October over export controls — a standoff that was at least temporarily defused with a deal reached last week between US President Donald Trump and his Chinese counterpart, Xi Jinping.
While Chinese exporters are heartened by lower US tariffs following the summit, they say they are still keen to hedge exposure to any future setbacks in bilateral trade ties. And following solid economic growth in the first half of 2025, China may see weakening momentum going forward as export front-loading wanes.
The official PMI for manufacturing last week showed factory activity slumped for the longest streak in more than nine years, prompting fresh calls for greater policy support.
The private gauge tends to reflect activity in smaller and more export-oriented companies.
What Bloomberg Economics Says…
“The RatingDog PMI continues to paint a brighter picture than the official survey. Both point to softer momentum, partly due to the long holiday, though the RatingDog gauge still signals expansion — in contrast to the official report’s warning of a sharper manufacturing contraction. Some modest relief may be on the horizon: the trade deal between China and the US should give exports a lift and help stem the year-end loss of momentum.”
— Chang Shu and Eric Zhu. For full analysis, click here
New business and output both expanded at weaker rates from September, according to RatingDog’s report, with goods producers lowering their export charges for the first time since April.
At the same time, the pace of job creation was the fastest in over two years, which RatingDog attributed to “the sustained rise in new work inflows.”
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