China's October Manufacturing PMI at 49.2... Two Consecutive Months of 'Economic Contraction'

[Asia Economy Reporter Changhwan Lee] Due to multiple adverse factors such as power shortages and soaring raw material prices, China's manufacturing sector has been in a contraction phase for the second consecutive month.

On the 31st, the National Bureau of Statistics of China announced that the Manufacturing Purchasing Managers' Index (PMI) for October was recorded at 49.2.

This figure is lower than the previous month (49.6). Following the drop below 50 for the first time in 19 months in September, it declined further.

The Manufacturing PMI, based on surveys of business officials, is interpreted as indicating an expansion phase when above the baseline of 50, and a contraction phase when below 50.

Due to the combined effects of global raw material price surges, sporadic COVID-19 outbreaks within China, power crises, the Evergrande crisis causing a sharp cooling of the real estate market, and global supply chain bottlenecks, China's economy is slowing down faster than expected.

China's economic growth rate for the third quarter fell to 4.9% (year-on-year), the lowest in one year.