The Caixin China General Manufacturing Purchasing Managers' Index (PMI), which gives a snapshot of operating conditions in the manufacturing sector, picked up to 50.1 in October, just off a 16-month low of 50 in September.
The figure was also below the 50.6 reading tipped in a Bloomberg News survey of economists, though above the 50-point mark that separates expansion from contraction.
But its overall GDP growth in the first three quarters remained at a high level of 6.7 percent and it is set to achieve its preset GDP growth goal of about 6.5 percent for this year.
United Kingdom manufacturing growth slumped to the lowest since the aftermath of the Brexit vote last month.
Consequently, manufacturers tried to partly pass on higher cost burdens to their clients through increased output charges. Consumer, intermediate and investment goods output all increased at stronger rates.
"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.
Finally, output expectations towards the coming 12 months improved, with firms suggesting that anticipations of further new order growth drove optimism.
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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 fall in new orders resulted in a sharp deceleration in the growth rate of manufacturing production. In a clear sign that inflationary pressures are continuing to build, strong customer demand meant firms were often able to push cost increases through to selling prices.
"The survey responses were gathered before this week's budget, which provided a welcome boost for manufacturers".
While new orders continued to rise during October, the rate of expansion slowed for the second month in a row.
"New orders and employment both fell for the first time since the Brexit vote as domestic and overseas demand were hit by a combination of Brexit uncertainties, rising global trade tensions and especially weak demand for autos", he added.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. Production and business confidence continued to cool despite stable demand. The region accounts for around 60 percent of global growth.
Markets care about the data because it is an important indicator of momentum within the economy.