In October, Caixin's manufacturing PMI rose 51.7 in April

On November 1, the purchasing managers index (PMI) of Caixin China's manufacturing industry in October recorded 51.7, up 0.3 percentage points from September, rising for four consecutive months, flat with February 2017, the highest since 2017. This trend is not consistent with the manufacturing PMI of the National Bureau of statistics. The manufacturing PMI in October released by the National Bureau of statistics recorded 49.3, down 0.5 percentage points, slightly higher than that in February, when the Spring Festival is held, which is the second lowest in the year. In October, the index of new orders rose sharply, the highest since February 2013. Foreign demand improved significantly. The index of new export orders rebounded significantly above the boundary between prosperity and withering, the highest since the outbreak of Sino US trade conflict in March 2018. Manufacturers generally reflect that the market situation has become stronger and customer demand at home and abroad has improved.

Domestic and foreign demand improved significantly, leading manufacturers to expand production. The output index has risen for four consecutive months, the highest since 2017. According to the classification data, the output of the three product categories has increased, with the investment category leading. However, the increase of production did not lead to the recovery of employment. In October, the employment index dropped significantly within the contraction range, the lowest in more than a year. Many companies fail to fill the vacancy after employees leave voluntarily, and they also take cost control measures. The improvement of demand drives manufacturers to increase procurement, but their inventory behavior is still prudent. In October, the purchasing inventory index fell slightly within the expansion range; affected by the use of inventory delivery by manufacturers, the finished product inventory index returned to the contraction range, but the decline was slight.

In October, the average input cost increased slightly, but the increase rate was lower than that of last month. The price of raw materials such as metals, coal and agricultural products rose, according to the manufacturers interviewed. The factory price index continued to decline within the contraction range, and the interviewed manufacturers said that the market price generally fell and had to choose to reduce the price accordingly. According to the classification data, except for the rise in the price of consumer products, the prices of intermediate and investment products have declined. In October, China's manufacturing industry's optimism on the production prospect in the next 12 months improved to the highest level in six months, but it is still at a historical low. The industry is still worried about the continued trade frictions between China and the United States and the impact of environmental governance. Zhong Zhengsheng, chairman and chief economist of moneta research, a financial innovation think tank, said that China's economy will continue to repair at a relatively fast speed in October. If terminal demand, especially infrastructure construction and export improvement, is sustained, the manufacturing industry will gradually have a stable foundation.