BEIJING: China’s private sector expanded at the weakest pace in sixteen months in October, survey data from IHS Markit showed Friday. The Caixin composite output index, which covers both manufacturing and services, dropped to 51.0 in October from 51.4 in September. However, any reading above 50 indicates expansion in the sector.
The softer increase in overall output was largely driven by a further slowdown in manufacturing production growth. At the same time, Chinese services activity picked up from September’s 21-month low. The seasonally adjusted Caixin China General Services Business Activity Index rose to 51.2 from 50.6. New business increased across both the manufacturing and service sectors during October. Employment at the composite level was little-changed for the third straight month in October, as further job shedding at manufacturers continued to offset hiring at services companies. “The Caixin PMIs for October showed that the economy had a relatively weak start to the fourth quarter. However, monetary policy is unlikely to be loosened unless major downside risks emerge,” Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said.
