PMIs soften amid lingering weakness

October PMIs weakened noticeably, with both manufacturing and non-manufacturing activity slipping back into contractionary territory. The headline manufacturing PMI fell to 49.3 in October from 50.1 in September, below both market expectations and our forecast (Bloomberg: 49.9, Barclays: 49.5). The pullback partly reflected National Day holiday distortions and some demand being brought forward ahead of the holiday, but the decline appears larger than typical seasonality, pointing to soft underlying momentum, particularly across traditional sectors such as construction materials, energy-intensive industries, textiles and consumer goods manufacturing. Based on the 2021-25 average, the manufacturing PMI typically fell by around 0.5pp between September and October, compared with the 0.8pp decline this year. Meanwhile, labour-market conditions showed little signs of improvement, with employment indices across manufacturing, services and construction remaining in contractionary territory. In