2014.10.2300:00:00UTC+00China Manufacturing PMI Rises Slightly In October - HSBC

China's manufacturing sector continued to expand at a slightly accelerated pace in October, the latest survey from HSBC Bank revealed in Thursday's preliminary reading with a PMI score of 50.4.

Now at a three-month high, the October score is up marginally from 50.2 in September.

A score above 50 signals expansion in a sector, while a reading below means contraction.

"Domestic as well as external demand showed some signs of slowing although both remained in expansion territory. Disinflationary pressures intensified, as both the input and output price indices declined further. Meanwhile both employment and inventory indices improved," said Hongbin Qu, Chief Economist, China & Co- Head of Asian Economic Research at HSBC.

Among the individual components of the survey, manufacturing output registered its slowest pace in five months - although it continued to expand.

The sub-indices for new orders, new export orders, backlogs of work and quantity of purchases all continued to show expansion but at a slower pace.

Employment continued to contract at a slower pace, while the decline accelerated for output prices, input prices and stocks of purchases.

Stocks of finished goods swung to expansion from contraction, while supplier delivery times lengthened at a faster rate.

"While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand. This warrants further policy easing and we expect more easing measures on both the monetary as well as fiscal fronts in the months ahead," Hongbin said.