BEIJING — China's factory activity contracted in October at its fastest pace in three months, an official survey showed on Saturday, October 31, as soft demand, including for exports, weighed on manufacturers in the world's second-largest economy, Reuters reported. The official manufacturing purchasing managers' index (PMI) fell to 49.3 from 50.1 in September, missing a 50.0 forecast in a Reuters poll, according to data from the National Bureau of Statistics (NBS). A reading above 50 signals expansion from the previous month, while one below 50 indicates contraction; at 49.3, October was also the lowest reading since July, according to market reports of the same release.

Source: Reuters

The weakness was not confined to factories. The NBS said the non-manufacturing business activity index — covering services and construction — fell 0.5 points to 49.7, and the composite PMI output index, which combines both sides of the economy, dropped a full point to 49.7. All three gauges therefore sat below the boom-or-bust line in the same month. Inside the factory survey, both supply and demand cooled together: the production index fell 1.9 points to 49.8 and the new orders index fell 1.1 points to 49.4.

Small factories felt it most; high-tech held up

By size, large enterprises were the only group still expanding, at 50.2, down 0.4 points. Medium-sized firms fell to 48.4 and small firms to 47.5, the weakest of the three. By industry, production and new orders in railway, shipbuilding and aerospace equipment and in computer, communications and electronic equipment all stood at 53.0 or above, while textiles, non-metallic mineral products and non-ferrous metal smelting and rolling were below the threshold on both supply and demand. Construction was a particular drag outside manufacturing: its business activity index fell sharply to 48.0 from 50.3, while services activity eased to exactly 50.0, and the non-manufacturing new orders index dropped to 44.4.

Huo Lihui, chief statistician at the NBS Service Industry Survey Center, attributed the October decline mainly to demand that had been released early ahead of the National Day holiday — shoppers and factories front-loading activity before the week-long break at the start of the month — and to a complex and volatile international environment, according to the bureau's interpretation of the data carried by Chinese and regional outlets. Expectations, notably, did not collapse with the headline numbers: manufacturers' production and business expectations index stood at 53.4, and the non-manufacturing business expectations index at 54.7, both comfortably in expansion territory.

Why it matters beyond China: the PMI is compiled from purchasing managers' reports on new orders, output and employment, and China's factories sit at the centre of Asian supply chains — a month in which Chinese production and new orders shrink together tends to show up next in demand for commodities, components and shipping across the region, and in the order books of exporters competing with China, India included. With business expectations still positive, markets will read November's survey as the verdict on whether October was a holiday-timing dip or the start of a softer stretch for the world economy heading into winter.

Sources: Reuters, October 31, 2026 — manufacturing PMI 49.3, fastest contraction in three months, missed 50.0 poll forecast, soft demand including exports; National Bureau of Statistics data as reported by Xinhua-style and regional coverage (Business Today Malaysia / BCCCI / BigGo Finance), October 31, 2026 — non-manufacturing 49.7, composite 49.7, production 49.8, new orders 49.4, size and industry breakdowns, construction 48.0, and NBS statistician Huo Lihui's holiday and international-environment explanation.