China’s factory activity likely shrank for a sixth consecutive month in October, according to a Reuters poll. Economists expect the official manufacturing PMI rose to 49.9 points from 49.8 points, but remained below the 50 point mark, indicating a contraction. The official PMI is set to be released on Thursday.
Although exports weakened and third-quarter growth was the slowest since early 2023, authorities expect recovery in the fourth quarter. Analysts from several institutions, including Citigroup and Standard Chartered, predict that the PMI could cross 50 this month, signaling growth. However, others, like Goldman Sachs and Nomura, foresee continued contraction.
September's industrial profits experienced their steepest decline of the year, driven by weak demand. This, along with rising deflationary pressures and muted loan demand, suggests the need for more stimulus. China’s finance minister has pledged additional fiscal measures, but details remain sparse. Earlier this month, the media reported that China may raise 6 trillion yuan ($842.7 billion) from special treasury bonds over three years.