(Yicai Global) Oct. 31 -- China's purchasing managers' index for the manufacturing sector slipped back into contraction territory this month after two straight months of expansion due to economic and pandemic factors.

The manufacturing PMI fell by 0.9 percentage points to 49.2 percent in October from September, the lowest reading since July, the National Bureau of Statistics announced today. A mark of 50 separates growth from contraction.

It is expected that the economy will regain momentum in the fourth quarter, the China Federation of Logistics and Purchasing predicted. Economic recovery is currently unstable but positive factors are growing as policies continue to further stimulate market vitality. Moreover, China's complete industrial system and stable industrial and supply chain show resilience, it added.

Both supply and demand declined in October. The sub-index of production was 49.6 percent, down 1.9 points from the previous month. That of new orders slid 1.7 points to 48.1 percent, remaining below 50 for four consecutive months.

The declines are seasonal as October figures are usually lower than those of September, according to the CFLP. Moreover, Covid-19 outbreaks in several regions are influencing the economy. Finally, international commodity price fluctuations continue to affect the domestic market, the organization added.

The PMI of industries with high energy consumption was 48.8 percent in October, down 1.8 percentage points, falling into the zone of shrinking, and this is one of the main reasons for the manufacturing slowdown.

The stagnating PMI index indicates that China's economic rebound is not standing on solid ground yet, said Zhang Liqun, researcher at the Development Research Center of the State Council.

Almost 53 percent of enterprises report insufficient demand and the new orders sub-index fell so demand is clearly contracting, Zhang said. The rising purchasing price and factory price indexes also prompt the government to keep on ensuring the stability of the industrial and supply chain, the researcher added.

The sub-index of production and operation activity expectations recorded a reading of 52.6 percent in October, still in the expansion range. Consequently, the recovery outlook is generally stable.

Among the 21 polled industries, 13 reported activity expectation indexes that are higher than the critical point of 50. Some of the most optimistic sectors include those of agricultural products and food processing, railroads and shipbuilding, aerospace equipment, as well as electrical machinery and equipment, as these sectors logged figures above 58 percent.

Editor: Emmi Laine, Xiao Yi