HSBC China PMI shows industry strong, adding jobs

By Jason Subler

BEIJING (Reuters) - Chinese factories ramped up both output and jobs in September to meet a fresh increase in orders, showing the country's recovery is on track, a survey released on Wednesday showed.

HSBC's China Purchasing Managers' Index (PMI) came in at 55.0, easing only slightly from August's 16-month high of 55.1.

It was the sixth month in a row that the index, compiled by British research firm Markit, has been above 50 -- the level that marks the difference between expansion and contraction in China's vast manufacturing sector.

"Although the headline PMI remained broadly unchanged from the previous month, there was a marked expansion of manufacturing employment in September," Qu Hongbin, chief China economist with HSBC in Hong Kong, said in a statement.

Production growth slowed a touch but remained robust, with the seasonally adjusted output sub-index pulling back to 57.6 in September from a 22-month high of 58.4 in August.

Responding to the increase in business, manufacturers added jobs at the fastest pace in 25 months.

New orders continued to grow quickly, signalling that the recovery in demand from both domestic and external sources was on track, Qu said.

"Rising employment in the manufacturing sector is even more encouraging because it suggests that China's infrastructure-led recovery is starting to spread over to the consumer sector," Qu said.