China factory index drops to 52.0 in October

China's manufacturing sector expanded at a slightly reduced rate in October, with the RatingDog PMI falling to 52.0 from 52.1 in September, a private survey released on Monday indicated. The figure surpassed the 51.6 average forecast in a Reuters poll, marking the threshold between expansion and contraction.

This private reading differed from the official government data published on Saturday, which reported an unexpected decline in factory activity. While overall new orders slipped to 53.3, export order growth decelerated to its lowest level in three months. Producers of consumer and intermediate goods reduced their export volumes, while those focused on investment goods increased theirs.

Price dynamics shifted in October as output prices dropped following a rise in September. Firms lowered prices to stimulate sales amid intense competition, a move facilitated by cheaper input costs. Export prices also declined for the first time since November 2025.

Employment levels rose for the second consecutive month, though the increase was minimal. Workloads continued to strain capacity, causing backlogs of unfinished work to grow for the ninth straight month. Meanwhile, purchasing activity accelerated to its fastest pace since February, and inventories of purchased goods increased at the strongest rate in five months.

Business sentiment remained positive but weakened to a nine-month low. Some companies identified high input prices and heightened competition as primary concerns affecting their outlook.