(Yicai) Oct. 31 -- Activity in China’s manufacturing sector slowed in October from the month before, dipping into negative territory, as factory output faltered amid an eight-day public holiday at the start of the month, and indicating that the country’s economic recovery still needs fortifying, according to the latest data.

China’s manufacturing purchasing managers' index came in at 49.5 in October, a dip of 0.7 point from September, according to figures released by the National Bureau of Statistics today. A reading below the benchmark of 50 indicates contraction, and one above shows expansion.

Despite a strong start to the year, China’s manufacturing PMI has been low since the second quarter, and only climbed above the benchmark in September, the NBS said.

The new orders sub-index tumbled 1 point in October month on month to 49.5, dragged down by a seasonal slump in demand for consumer goods after the National Day break and the start of the chemical products sector’s off-season period, Wen Tao, analyst at the China Logistics Information Center, told Yicai.

But with the arrival of winter, demand for consumer goods and fuel should increase and factory output will pick up quickly, Wen said.

Businesses remain optimistic. Last month, the factory production and operation expectations sub-index climbed 0.1 point from September to 55.6 and has stayed at a high level for four consecutive months, according to the NBS.

China’s non-manufacturing business activity index sank 1.1 percent month on month to 50.6 but remains in positive territory, the NBS said.

The Chinese government will issue an additional CNY1 trillion (USD136.7 billion) in special treasury bonds in the fourth quarter, on top of other stimulus measures, to help boost the macro-economy, Wen said.

Editor: Kim Taylor