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BEIJING: China's manufacturing activity continued to expand in October, as domestic and overseas demand strengthened and employment picked up, an independent survey published on Monday showed.
The HSBC China Manufacturing PMI (Purchasing Managers Index) rose to an 18-month high of 55.4 in October from 55.0 in September.
A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.
"We believe the ongoing strong recovery in the manufacturing sector should gain further momentum in the coming months, underpinning strong economic growth in the fourth quarter," Qu Hongbin, chief economist for China at HSBC, said in a statement.
A separate official PMI compiled by the National Bureau of Statistics showed manufacturing activity rose to 55.2 in October - the highest since May 2008 - from 54.3 in September.
The HSBC survey showed manufacturers were hiring at the fastest pace since the index started in April 2004 as factories tried to keep up with new orders.
Foreign order levels rose for the fifth straight month and at the strongest rate since June 2007, HSBC said in a report, as global economic conditions improved.
"Anecdotal evidence suggested that firmer demand from abroad, with North America mentioned in particular, had pushed export sales higher," HSBC said.
China's economy expanded by 8.9 per cent in the third quarter, up from 7.9 per cent in the second quarter and 6.1 per cent in the first three months, mainly as a result of massive government spending amid the global downturn.
Beijing announced a four-trillion-yuan (US$ 586 billion) stimulus package a year ago in a bid to prop up growth in the country by boosting investment in infrastructure and other government-backed projects.
The HSBC PMI sank to a record low of 38.8 in November last year as the global financial crisis took hold, but improved continuously in the following months, moving above 50 in March.
Manufacturing accounted for more than 40 per cent of economic output last year in China, which has been hit hard by evaporating demand for its products in key export markets such as the United States and Europe.
- AFP/sc
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