Chinese manufacturers signaled improvement in growth during October

China's Caixin manufacturing PMI for October comes in at 51.2 vs 50.2 exp and 50.1 last. The data follows better than expected China's government Manuf PMI, published at 1GMT.

Summary

"Chinese manufacturers signalled an improvement in growth at the start of the fourth quarter, with output expanding at the quickest rate in over five-and-a-half years amid a rebound in new order growth. Stronger demand appeared to be led by improved domestic orders, however, as the level of new export sales fell slightly over the month."

"Meanwhile, companies cut their staff numbers at the slowest pace in 17 months, while backlogs of work continued to accumulate. Inflationary pressures picked up sharply in October, with input cost inflation accelerating to its fastest since September 2011 and output charges rising to the greatestextent since February 2011."

Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing PMI for October climbed to 51.2, up 1.1 compared to the previous month, marking the fastest growth seen in the sector in two years amid apparent signs of an improvement."

Dr. Zhong added: "The index readings for new orders and output for October were both much higher than in September, and those for input and output prices rose even more, indicating a return of inflationary pressure. The economy seems to be stabilizing for the moment, owing primarily to policies implemented to sustain growth. Supportive policies must be continued, or industrial output may be dragged down by a slowdown in investment.”