By Ellen Zhang and Ryan Woo
BEIJING (Reuters) -China's factory activity in September expanded at the quickest pace since March, as rising new orders drove faster production growth, a private-sector survey showed on Tuesday.
The RatingDog China General Manufacturing Purchasing Managers Index (PMI), compiled by S&P Global, rose to 51.2 in September from 50.5 in August, beating analysts' expectations of 50.2 in a Reuters poll. The 50-mark separates growth from contraction.
The reading was better than that
of an official survey released earlier on Tuesday, which showed factory activity extending declines for a sixth straight month.
"Overall, September's PMI improvement was more broad-based," said Yao Yu, founder of RatingDog.
Better underlying demand conditions, business promotional efforts and new product launches supported the latest upturn in overall new business, with the rate of expansion the fastest since February, the private survey showed.
Notably, new export orders increased for the first time since March.
"Although new export orders rose only modestly, it was still a relatively positive signal, alleviating some market concerns over the recent weakness in exports," Yao said.
Rising inflows of new work underpinned the quickest gain in production in three months.
That sent business optimism to the highest since March.
Manufacturers lifted their purchasing activity, while inventories of finished goods rose due to increased production and manufacturers' efforts to rebuild stock levels.
The government's pledge to put an end to aggressive price cuts by some Chinese companies pushed up input prices to the highest since November 2024, but average selling prices declined slightly after stabilising in August.
Strong competition among manufacturers led firms to largely absorb cost increases to support sales, according to anecdotal evidence. However, exporters continued to raise their charges to reflect rising input costs amid a tariff truce with the U.S.
Still, job shedding continued in the manufacturing sector in September, though the rate of reduction eased to the slowest in six months.
With front-loaded fiscal measures gradually fading, the state planner said on Monday China will deploy policy-based financial tools to the value of 500 billion yuan ($70 billion) to accelerate investment projects.
($1 = 7.1180 Chinese yuan)
(Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)
