China's factory sector barely grows in October, Caixin PMI

BEIJING (Reuters) – China's manufacturing sector is growing after September, with a private survey showing that the United States has intensified its contraction in export orders.

The Caixin / Markit Manufacturing Purchasing Managers' Index (PMI) for October, released on Thursday, edged up to 50.1 from 50.0 in September. Economists polled by 49.9, just off the 50-mark that divides expansion from contraction.

The rather shallow growth PMI survey released on Wednesday, May 24, 2008 China is manufacturing sector expanded at the weakest pace in over two years.

The brittleness in the vast factory sector, a major domestic and global driver of growth, backs expectations of further stimulus support from Beijing as it tries to prevent a sharp downturn for the economy. The Sino-U.S. trade row, and the risks of the dispute to the Chinese and global economies, recently.

The Caixin survey showed the production of output dropped for the second half and was only fractionally above the neutral 50.0 level. That dragged business confidence between manufacturers to an 11-month low.

"China's economy has not seen any improvement," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group, in a note accompanying the survey.

"The expansion across the manufacturing sector was still weak. Production and business confidence continued The pressure on production costs did not ease. "

While new export orders – an indicator of future activity – improved to 48.8 from 47.6 in September, they remained in contraction phase for the United States deepened.

October was the first full month after the latest U.S. tariffs went into effect.

Sept. 24, and U.S. President Donald Trump has been attacked by the United States.

The external pressure is already starting to depress activity in major areas of China's economy, which grew at its weakest pace since the global financial crisis in the third quarter. Analysts say business conditions will get worse before getting better.

The sub-index for overall new orders – domestic and foreign – rose slightly to 50.4 from 50.1 in September.

The surveyed pages are still in evidence. That could be a further squeeze on profit margins, and risks setting off a vicious circle of lower business investment, job losses and deepening gloom for the broader economy.

China's manufacturing sector has been squeezed by a reduction in sources of credit Beijing's multi-year crackdown on corporate debt and risky lending practices, with smaller firms especially under strain.

Policymakers have taken a slew of measures to reduce risks to growth, including injecting more liquidity, lowering financing costs, cutting taxes and fees and more.

Faced with higher costs and sluggish demand, Chinese manufacturers have been reduced to five years.

The aerospace research and manufacturing sector remains the second-largest performing sector in the world, according to an employment index report released by the China Institute for Employment Research and a leading Chinese career platform Zhaopin.

"The trade / import and export sector in the third quarter of 2018, reflecting the continuous influence of the U.S.-China trade war," the report said.

But the rate of payroll reduction in the manufacturing sector slowed down, according to the Caixin survey, which focuses on smaller and medium-sized companies which are vital to China's job creation.

Chinese officials have pledged to prevent extensive job losses.