Manufacturing activity slumped again in China in October although at a less severe pace than the previous month, a closely-watched survey showed Monday.
The preliminary Caixin China manufacturing purchasing managers' index (PMI) rose to 48.3 in October, above the 47.5 forecast in a Reuters poll.
This compares with a final reading of 47.2 in September, the lowest since March 2009. A print above 50 indicates an expansion in activity while one below points to a contraction.
"The latest PMI readings suggest that momentum in the manufacturing sector continued to improve last month, helped by a pick-up in foreign demand, and that service sector growth is still holding up reasonably well," said Julian Evans-Pritchard, China economist at Capital Economics.
Both output and new orders components rose, with the new export order component rising to 50.7, the highest level in 10 months.
The closely-watched gauge of nationwide manufacturing activity focuses on smaller and medium-sized companies, filling a niche that isn't covered by the official data.
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Over the weekend, China's official PMI came in at 49.8 for October, according to data from the National Bureau of Statistics (NBS), suggesting activity contracted for a third straight month.
"China's official manufacturing PMI remained in contraction in October, albeit stabilizing somewhat. The expansionary fiscal policy and further eased monetary policy should help engineer a modest rebound in Q4 and Q1 2016," economists at ANZ said in a note.