China's private sector expanded at the weakest pace in more than two years in October with both services and manufacturing noting weaker performances, survey results from IHS Markit showed Monday.
The Caixin composite output index fell to a 28-month low of 50.5 in October from 52.1 in September.
Service sector activity rose only marginally, with the Caixin services Purchasing Managers' Index fell to a 13-month low of 50.8 from 53.1 in September.
Meanwhile, manufacturing production stagnated, following increases in each of the preceding 27 months.
The softer increase in services activity coincided with the first stagnation of new business for nearly ten years in October. At the same time, new orders placed with goods producers rose only slightly.
As a result, composite new work increased at a marginal pace that was the weakest in 32 months.
Despite the softer expansion in activity, staffing levels expanded at services companies. Meanwhile, manufacturers signaled a sustained reduction in employment in October.
At the composite level, staffing levels were broadly unchanged in October. Services companies registered a slower rise in operating expenses. Meanwhile, average cost burdens faced by manufacturers rose at a sharp and accelerated pace. At the composite level, input prices rose at a solid pace that was unchanged from September. After broadly stagnating in September, prices charged by services companies rose slightly. Factory gate prices also increased in the latest survey period. Consequently, output charges rose moderately when measured across both sectors.
Although Chinese companies remained upbeat towards the 12-month business outlook in October, the level of positive sentiment fell across both manufacturers and service providers.
At goods producers, optimism descended to an 11-month low, while service providers indicated the weakest level of confidence since July.