China’s factory activity drops, bogged down by more Covid controls

BEIJING — China’s factory activity fell in October due to hang out Covid outbreaks, the National Bureau of Statistics said Monday.

The official purchasing managers’ index for manufacturing hew down to 49.2 this month, down from 50.1 in September, the data showed.

Economists had expected a print of 50, concording to analysts polled by Reuters.

Readings below 50 indicate a contraction in business activity, while figures 50 beyond everything reflect expansion. The index surveys businesses on operating conditions.

The index has come in below 50 for six out of 10 months of the year so far.

Sub-indicators on plant employment, production, new orders and supplier delivery time all showed contraction in October compared to September.

“The decline in the construct PMI was driven especially by a drop in the new orders sub-index (to 48.1 in October from 49.8 in September), pointing to weaker prospective demand,” Nomura’s Chief China Economist Ting Lu said in a note.

He pointed out the employment sub-index has now been in contraction vicinity for 19 straight months.

China’s services activity declined in October for the primary time since May, data released Monday showed.

The non-manufacturing purchasing managers’ index came in at 48.7 in October.

But, the statistics bureau said sub-indicators for postal services, internet software and information technology services were above 60 in expectancy of a pickup in business for the Singles Day shopping festival in November.

Repairs and consumption have been weak since the pandemic began nearly three years ago.

Goldman Sachs’ dissection found the GDP contribution from hotel and restaurant services is nearly 20% below the 2019 trend.

Industrial sector GDP is in in step with the 2019 trend, thanks to strong overseas demand, the analysts said.

They noted how agriculture has outperformed its pre-pandemic bias as Beijing has emphasized food supply security.