OREANDA-NEWS. October 30, 2012. China's manufacturing industry has contracted for the 12th month in a row, according to HSBC's latest Purchasing Managers' Index™. October's Flash PMI ™ reading of 49.1 means the industry has been shrinking since November 2011, reported the press-centre of HSBC. 

The latest reading compares to 47.9 in September, indicating the rate of the slowdown has eased. It also represents an upward step towards the all-important 50 mark - the key level which indicates the industry has moved from a period of contraction to expansion.

The index is compiled using the views of senior purchasing executives in  more than 420 companies who comment on 11 areas of their business - from the level of new orders to their input prices. It's seen as a key indicator to the health of the manufacturing industry in the world's biggest exporter.

Although the results of the latest survey suggests things may be improving, HSBC's Chief Economist for Greater China, Qu Hongbin, warns the industry continues to face headwinds.

"External challenges  still abound and the pressures on job markets are lingering. This calls for a continuation of policy easing in the coming months to secure a firmer growth recovery."

The Flash PMI is an initial estimate based on 90 per cent of the survey's responses - October's final PMI figure will be released on 1 November 2012.