BEIJING - China's manufacturing activities improved slightly in September, underscoring sustained output growth in the month, according to a flash reading of the HSBC survey released on Tuesday.

The HSBC flash manufacturing purchasing managers' index (PMI) in September stood at 50.5, a rise of 0.3 compared with 50.2 in August.

The flash PMI reading was better than the market expectation of 50. A reading under 50 indicates contraction, while one over 50 signals expansion.

"The picture is mixed, with new orders and new export orders registering some improvement. Meanwhile, the employment index declined further and deflationary pressure intensified," said Hongbin Qu, chief economist for HSBC China.

The PMI new orders index rebounded by 1, and the new export orders index rose 1.9, indicating that exports will remain the most important economic growth driver. The raw materials inventory index continued to fall, but at a slower pace than in August. The finished goods inventory index was flat compared with August.

Qu said economic activity in the manufacturing sector showed signs of stabilization in September, but the property downturn remains the biggest downside risk to growth.

He said his research team continues to expect more monetary easing from the central bank to steady growth.

HSBC's preliminary figure for the Chinese PMI is calculated based on 85 to 90 percent of the total responses to HSBC's monthly PMI survey, and is issued about one week before the final PMI reading.

The National Bureau of Statistics and the China Federation of Logistics and Purchasing are expected to release official PMI data for September on Oct 1. The official PMI data are based on a survey of purchasing managers in more than 820 companies in 20 industries.

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