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.
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.