China October Caixin Manufacturing PMI Steady

A private gauge of China's factory activity held steady in October, indicating a stable pace of expansion even though official data showed weakness in production and demand.

The Caixin China manufacturing purchasing managers' index remained steady at 51.0 in October, Caixin Media Co. and research firm Markit said Wednesday. The 50 level separates an expansion in manufacturing activity from a contraction.

While the rate of growth in production was the weakest in four months, some sub-categories--including new orders--improved, Caixin said.

"The stringent production curbs imposed by the government to reduce pollution and relatively low inventory levels have added to cost pressures on companies in midstream and downstream industries," Zhengsheng Zhong, an economist at CEBM Group, said in a statement accompanying Tuesday's release. The cost pressures could have a negative impact on output in the coming months, he added.

The Caixin PMI reading came after China's official manufacturing PMI, a competing government gauge, dropped to 51.6 in October from 52.4 in September, dragged down by slower production and weaker demand, according to data from the National Bureau of Statistics issued Tuesday.

Economists expect China's economy to slow in the second half of 2017, as government measures to rein in a hot property market and rising corporate debt start to weigh further on business sentiment and economic activity.

The Caixin China Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 manufacturing companies.

Compared with the official gauge, the Caixin PMI tends to more closely track small private manufacturers in China that don't benefit as much from government stimulus as state-owned firms.

Write to Lin Zhu at lin.zhu@wsj.com

(END) Dow Jones Newswires

October 31, 2017 22:27 ET (02:27 GMT)