Beijing, October 28

Activity in China’s manufacturing sector likely picked up slightly in October but remained subdued, a Reuters poll showed, fuelling hopes that the world’s second-largest economy may be bottoming out after a burst of stimulus measures.

Official manufacturing Purchasing Managers’ Index (PMI) likely edged up to 50 in October from 49.8 in September, as per a forecast of 20 economists in a Reuters poll.

Still, the expected improvement remained marginal, with the reading at the 50-point mark that separates contraction from expansion on a monthly basis.

Factory activity shrank in September for a second straight month, albeit at a slower pace than in August.

“Stimulus measures continued to gain traction in October, which would be conducive for large and state factories,” said Zhang Yiping, an analyst at Merchants Securities in Shenzhen.

To shore up growth, the government has cut interest rates six times since November and lowered the amount of cash that banks must hold as reserves four times this year. The latest cut in interest rates and banks’ reserve requirement came last Friday.

Beijing has rolled out a flurry of steps since last year, including quickening spending on infrastructure and easing curbs on the ailing property sector. The latter have helped revive weak home sales and prices but have not yet reversed a sharp decline in property investment.

Data released last week showed China’s economy grew 6.9 per cent between July and September from a year earlier, dipping below seven per cent for the first time since the global financial crisis.

Some analysts hope the third-quarter cooldown could mark the low point for 2015 as a burst of stimulus measures rolled out by Beijing gradually take effect in coming months, but muted monthly data for September kept such optimism in check.

The official PMI factory numbers will be released on November 1, alongside official services PMI. Caixin/Markit manufacturing PMI will be released on November 2.