November 1, The Purchasing Managers Index (PMI) of China’s manufacturing sector fell to 50.4% in October after rising for 2 straight months, the China Federation of Logistics and Purchasing (CFLP) said on Tuesday.

The decline indicated the country’s economic growth may continue to slow in the last quarter of this year, the CFLP said, adding a moderate economic expansion would not change.

China’s gross domestic product is likely to grow around 9.2% in 2011, the federation said.

The PMI includes a package of indices to measure the strength of the country's manufacturing sector. A reading above 50% indicates economic expansion.

Among the 11 sub-indices included in the index, the new export order index and import index recorded a decrease of more than 2 percentage points (pps).

The input price index fell by 10.4 pps from September to 46.2%, the CFLP said.

CFLP analyst Zhang Liqun said growth in exports and investment slowed down and enterprises faced a liquidity squeeze in the third quarter.

The dramatic fall in the input price index showed easing cost pressures, while it also indicated enterprises would take more destocking activities due to expectations on future prices, Zhang said.

Economic growth may continue to moderate due to demand factors, Zhang noted.

Source:21cbh.com