China's two main manufacturing indexes have come in better than expected for October - bolstering the sector's recovery from COVID-19 demand destruction.
The Caixin/Markit Purchasing Managers' Index for China manufacturing released Sunday increased to 53.6 for October - the sixth consecutive month this indicator has remained above 50. The October result was the highest since January 2011 and was also better than the 53.0 forecast by analysts in a Reuters poll
PMI readings above 50 indicate expansion. They reveal month-on-month expansion or contraction in factory output of mainly small- and medium-sized companies.
China's official manufacturing index, which includes a larger number of big businesses and state-owned companies, was 51.4 for October. Analysts polled by Reuters forecast a 51.3 reading.
Market analysts agree China's manufacturing has been recovering as the country's coronavirus outbreak appears under control.
The Caixin/Markit PMI for October confirms China's manufacturing recovery continues to accelerate, according to Wang Zhe, senior economist at Caixin Insight Group.
"To sum up, recovery was the word in the current macro economy, with the domestic epidemic under control," he said.
"Manufacturing supply and demand improved at the same time. Enterprises were very willing to increase inventories. Prices tended to be stable. Business operations improved and entrepreneurs were confident."
Wang said both demand and supply for China goods continued to recover as "fallout from the COVID-19 pandemic faded."
However, China companies haven't boosted hiring. Wang said a full recovery in employment depended on "stronger and more-lasting business confidence."
China's national unemployment rate in September in urban areas was 5.4% and 5.6% in August. Its unemployment rate hit 6.2% in February as COVID-19's economic effects began to bite.
