China's factory activity climbs to five-month high in September

China's manufacturing sector expanded at its quickest pace in five months during September, a private business survey showed, as output and new orders — including from overseas buyers — both gathered strength.

The RatingDog China General Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to 52.1 in September from 51.5 in August. The reading stayed comfortably above the 50-mark that separates expansion from contraction and came in ahead of a poll forecast of 51.6.

The result adds to evidence that China's export-driven momentum has carried into the second half of the year, with the world's second-largest economy leaning on overseas demand to counter a prolonged property downturn and subdued consumer spending at home. The country's goods trade surplus is on course to exceed $1 trillion for a second consecutive year.

Output increased at its fastest rate since April, while total new business grew at the quickest pace in five months. New export orders expanded at the fastest rate in seven months, with surveyed firms pointing to stronger market conditions across several Asian economies.

Signs of strain on capacity prompted manufacturers to hire additional workers, and employment returned to growth after stalling at 50.0 in August.

Cost pressures also intensified. Input prices rose at the quickest pace since May, driven by higher raw material and energy costs, particularly for metals and oil. Manufacturers raised their selling prices slightly, following a marginal decline in August.

Firms remained optimistic that output would increase over the next 12 months.