Article by ForexTime

A gauge of China’s manufacturing activity fell to a five-month low in October, despite a series of government support measures aimed at aiding growth, suggesting that more help may be needed to boost the world’s second largest economy.

Analysts said factory data released Saturday kicked off the fourth quarter of the year on a surprisingly weak note and revealed particular problems among smaller and midsize companies.

“We can expect more targeted [support] measures and the government may have to step in more forcefully,” said Andrew Polk, economist at the Conference Board.

China’s official Manufacturing Purchasing Managers’ Index dropped to 50.8 in October from 51.1 in September, according to the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics. The index remained above the key 50 level, which separates expansion from contraction compared with the previous month, but was below expectations of a reading that matched September’s tally of 51.1.

China’s economic growth has been sluggish this year, pulled down by a weak property sector and tight credit conditions. Some analysts have questioned whether growth will reach the government’s target of about 7.5% this year. Growth slipped to 7.3% year-to-year in the third quarter from 7.5% in the second quarter and 7.7% for all of last year. The third quarter pace was the slowest since the first quarter of 2009.

Article by ForexTime

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