China manufacturing sentiment indicates contraction for third month

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Business sentiment in China’s manufacturing sector was in negative territory in October for the third consecutive month, according to an official survey released Sunday.

The official Purchasing Managers’ Index (PMI) was at 49.8 in October, unchanged from September, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

A figure above 50 generally means a positive outlook as measured by managers’ purchasing intentions, while below 50 is taken as a negative reading.

The index dipped below the threshold in August to 49.7, according to the statistics bureau.

October’s result was more pessimistic than analysts had anticipated, indicating that the slowdown in Chinese manufacturing has not yet bottomed out amid slack global demand, financial news agency Bloomberg reported.

Within the results, the sub-index for production was 52.2, down 0.1 points from 52.3 in September, but up from 51.7 in August.

The sub-index for new orders came in at 50.3, “back to expansion territory and up from 50.2 in September,” the official Xinhua news agency reported.

Within those surveyed, sentiment for the employment sub-index fell 0.1 points to 47.8, and raw materials storage fell 0.3 to 47.2.

Analysts have predicted that recent stimulus measures will take effect in coming months as China struggles to meet its growth target for 2015 of about 7 per cent.

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