China's private sector expanded at the fastest pace since early 2013 in October, mainly driven by manufacturing activity.
The Caixin composite output index climbed to 52.9 from 51.4 in September, survey data from IHS Markit showed Thursday. A reading above 50 indicates expansion.
Although the services activity posted moderate growth, overall expansion was largely driven by the manufacturing sector in October.
The Caixin services Purchasing Managers' Index rose to 52.4 versus 52.0 in September. The reading signaled the fastest growth in four months.
Total new order growth strengthened at the beginning of the fourth quarter, with both sectors reporting an improvement in underlying market conditions and a subsequent increase in customer demand. At composite level, new orders increased at the strongest pace since November 2014.
While manufacturers continued to cut their staff numbers, services companies expanded their payrolls for the second consecutive month. Overall, Chinese employment declined at a marginal pace that was the slowest in the current 17-month sequence of job shedding.
Manufacturing companies reported the sharpest rate of input cost inflation since September 2011. At the same time, input prices rose at a moderate pace across services companies.
Selling prices for manufactured goods increased at the fastest rate since February 2011. Meanwhile, prices charged for Chinese services was little-changed from the previous month.
Nonetheless, the marked rise in prices set by goods producers led composite output charges to increase at the quickest pace since April 2011.
Service providers remained generally positive that business activity would increase over the next year.
"Overall, the economy continued to expand in October and at a stronger growth rate," Zhengsheng Zhong, director of macroeconomic analysis at CEBM group, said.
"It may be possible to sustain this stable condition throughout the fourth quarter, but it's important that supportive policies are not relaxed because the economy still lacks sufficient growth momentum," Zhengsheng added.
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