China’s economy had a softer start to the fourth quarter, with manufacturing activity growing at the slowest pace in three months in October, as the government’s campaign to curb pollution took a toll on industrial output in industries such as coal and steel.The official Manufacturing Purchasing Managers Index (PMI) fell to 51.6 in October from 52.4 the previous month, the weakest reading since July, a report released by the National Bureau of Statistics (NBS) showed. The production subindex fell to 53.4 from 54.7 in September, the weakest since January. A number above 50 indicates activity expanded, while anything below 50 signals it contracted.The official nonmanufacturing PMI, which covers both the services and construction industries, declined to 54.3 in October from September’s 55.4 — which was the strongest reading in more than three years.
The latest PMI readings provide “early hints of a post-Party Congress slowdown” in the world’s second largest economy, said Julian Evans-Pritchard, a Singapore-based analyst with research firm Capital Economics, referring to the quinquennial national congress of the ruling Communist Party held earlier this month. The congress saw new party leaders elected and set out a road map for the country’s development through 2050.
“With fiscal support likely to be reduced now that the Party Congress is over and the environmental crackdown set to intensify, we anticipate a further slowdown in the months ahead,” he said in a research note after the data.