China’s factory activity falls again in October – but at slower rate as exports shows sign of life

China’s factory activity fell for an eighth straight month in October, but at a slower pace as export orders showed some signs of life, a private survey showed on Monday – pointing to continued sluggishness in the world’s second-largest economy.

The Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) edged up to 48.3 in October from 47.2 in September.

The highest reading since June 2015 will likely fuel hopes that the industry’s long slump may be bottoming out, but it remained well below the 50 mark – signifying a further contraction in activity that will raise doubts about whether the economy could see a modest pick-up in the fourth quarter.

Read more: China’s factory activity in September plummets to lowest level since March 2009: surveys

Taken together with official factory and services sector surveys released on Sunday, the readings reinforced the view that business conditions in China are continuing to deteriorate, but at a gradual – albeit uneven – rate, with no signs of a hard landing, which recently spooked global investors.

Suggesting some improvement in sluggish global demand, the Caixin survey showed new export orders expanded for the first time since June, albeit marginally. The sub-index rose to 50.7 from 44.6 in September.

However, demand at home remained sluggish. The overall new orders sub-index, which covers domestic and export orders, shrank for the fourth month in a row in October. But the contraction was more modest than in September.

“The slight upswing shows the manufacturing industry’s overall weakening has slowed down, indicating that previous stimulus measures have begun to take effect,” said He Fan, Chief economist at Caixin Insight Group.