China factory activity contracts; October PMI at 49.3

China’s factory activity slipped back into contraction in October, with the official manufacturing purchasing managers’ index falling to 49.3, National Bureau of Statistics data showed.

A PMI reading below 50 indicates contraction. The October figure was down from 50.1 in September and below a 49.9 forecast in a Bloomberg survey of economists, though it was slightly above July’s 49.2 reading.

National Bureau of Statistics statistician Huo Lihui said the decline was partly driven by a week-long national holiday at the start of the month and a “complex and volatile international environment”. Huo also said higher international crude oil prices had pushed up prices for coal, rubber and plastic products.

The bureau said the consumer goods industry PMI fell 1.9 percentage points from the previous month, while high-tech industries maintained positive momentum linked to artificial intelligence.

China’s non-manufacturing PMI, covering areas including services and construction, fell to 49.7 in October from 50.2 in September. Huo said some service sectors, especially finance, had seen weaker business conditions, and construction activity also slowed.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said strong exports were not enough to lift China’s economic momentum and that weaker external demand in 2027 would require more policy support for domestic demand.