(Bloomberg) -- China’s manufacturing activity unexpectedly picked up last month despite a weeklong holiday, according to a private survey, a further sign of stabilization after Beijing unleashed a stimulus package to shore up the economy.

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The Caixin manufacturing purchasing managers index rose to 50.3 last month from 49.3 in September, according to a statement released by Caixin and S&P Global Friday. This compares with a median forecast of 49.7 by economists in a Bloomberg poll. The 50-mark divides expansion and contraction.

The reading followed official surveys released Thursday showing factory activity ended five months of contraction last month, adding to evidence that a stimulus package unveiled in late September has lifted sentiment. The pace of growth exceeded expectations by all 12 analysts surveyed by Bloomberg.

The benchmark CSI 300 Index of onshore Chinese stocks rose 0.55%. The offshore yuan weakened 0.1% against the dollar and China’s 10-year government bond yield was steady at 2.14%.

The survey shows that “market demand stabilized and optimism improved, suggesting early signs of policy impact,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the release. The uptick in activity defied the drag from fewer working days in October as a result of the Golden Week holiday.

In another sign of improved confidence, China’s residential property sales rose in October, the first year-on-year increase of 2024.

But the Caixin data also gave reason for caution, with manufacturers reporting job cuts for a second straight month. The employment subindex fell to its lowest level since May last year, with widespread declines in staffing among companies producing capital goods such as equipment and tools.

And while exports have been a relative bright spot in the Chinese economy, new export orders shrank for the third consecutive month, according to the survey, reflecting slowing global demand.

Chinese exports have powered the economy this year with shipments in the first three quarters soaring to the second highest value on record, but the pace of growth slowed sharply in September.

What Bloomberg Economics Says...

“This export-oriented survey also contains a message that’s consistent with leading indicators from major trading partners — external demand looks shaky ahead. Weakening external support would mean another challenge for policymakers as they try to rejuvenate the economy.”