It appears China's manufacturing sector is experiencing some of the sluggishness being seen in the U.S.
China's purchasing manager's index (PMI) for the manufacturing sector dropped to 54.7 points in October from 57 in September, the China Federation of Logistics and Purchasing said.
In a statement on its website, the CFLP said the fall was due to the tough comparison of a year ago. (China first reported PMI data in June 2005.) The overall index was also dragged down by slump in sub-indices for certain industries.
A reading above 50 indicates growth in purchasing while a reading below 50 represents a contraction.
The production index was 58.2 in October, down 3.8 points from September, the CFLP said, while the new orders index rose to 59.7 in October, versus 62.7 a month earlier.
The export orders index was at 57.4 in October, down from 60.2 in the previous month, and the inventory of finished goods index was at 44 against 44.7 in September.
The input price index fell by 3.2 points to 53.5, reflecting an easing in the uptrend for resource prices, the statement said, adding that amid falling international crude prices, the purchase price indices for chemical products, chemical fiber and oil refining dropped to as low as 30 points.
Meanwhile, manufacturing slowed slightly in the UK in October, but still signaled solid improvement for the 15th consecutive month according to a report released Wednesday.
The Royal Bank of Scotland’s Purchasing Manager’s Index (PMI) held above the 50.0 mark at 53.7 in October, but was down slightly from 54.5 in September. October’s reading is also above the year-to-date average of 53.2.
After peaking in September, the manufacturing production growth rate reverted to the trend noted throughout much of 2006. Companies associated higher output to increased levels of new work received. New products and improved capital and labor efficiency also contributed to a rise in production.
Companies reported higher prices paid for metals, chemicals and plastics. A decline in purchasing costs was recorded partly due to recent reductions in the price of transportation fuels.
Improvements in staff productivity and plant efficiency meant that growth of output could be sustained without raising staffing levels in October. Companies remained guarded about adding additional headcount at a time when cost pressure was somewhat high.
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