The PMI index fell to 49.1 points from 50 in September, compared to forecasts of 49.7. Job creation was the strongest since December 2017, it said, adding that businesses were able to lower their outstanding business volumes for the second straight month. Readings above 50 signal expansion, while those below 50 signal a contraction. There were modest gains elsewhere: China's Caixin Manufacturing PMI reading nudged higher to 50.1 from 50, moving in the opposite direction from the official manufacturing report released on Wednesday. Moreover, October's reading reached a five-month high.
'To see inflows of new orders first decline since the middle of 2016 following the referendum, will send shivers down the spine of business'.
A lack of stock at suppliers stretched delivery times for inputs, while work backlog rose at the slowest pace since June 2016, it said.
"The overall health of Taiwan's manufacturing industry declined at the start of the fourth quarter, as production, new orders and exports all fell at the quickest rates in over three years", said Annabel Fiddes, principal economist at IHS Markit, which compiles the survey.
"The expansion across the manufacturing sector was still weak".
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Although input costs continued to increase, the rate of inflation dropped to its lowest in 15 months, encouraging some producers to lower charges and others to keep prices unchanged.
According to the survey, detrimental exchange rate movements, rising raw material prices, and the sales and service tax (SST) were all cited as sources of cost pressures in October. This means the manufacturing sector is growing more slowly, as Zhao Qinghe, a senior statistician from NBS' Service Survey Center, interpreted the PMI data.
"Latest PMI data suggests the worst of the current difficulties may have been seen in September, with key indicators such as output, new orders and employment all moderating at weaker rates in October amid a slowdown in inflation". The sub-index fell to 46.9 from 48.0 in September.
"The survey responses were gathered before this week's budget, which provided a welcome boost for manufacturers". The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions.
The feeble performance in the vast factory sector, a major domestic and global driver of growth, backs expectations of further stimulus support from Beijing as it tries to prevent a sharp downturn for the economy.