Prices of goods at the factory gate rose in China for the first time in more than four years in September, officials said, in a positive sign for demand in the world’s second-largest economy.

The producer price index (PPI) rose 0.1 per cent year-on-year in the month, according to the National Bureau of Statistics, adding it “ended 54 consecutive months of year-on-year falls’’.

Chinese firms have for years been battered by falling prices for their goods in the face of chronic overcapacity and weak demand, putting a damper on growth in a key driver of the world economy.

Protracted drops in PPI bode ill for industrial prospects and economic growth, as they put off customers — who seek to delay purchases in anticipation of cheaper deals in future —starving companies of business and funds.

September’s increase was the first rise since January 2012 and came in ahead of expectations of a 0.3 per cent fall in a survey of economists by Bloomberg News.

The consumer price index, a key gauge of retail inflation, rose 1.9 per cent, also above expectations of 1.6 per cent.

China expanded last year at its slowest rate in a quarter of a century as Beijing strives to effect a difficult transition from reliance on exports and fixed-asset investment to an economy driven by consumers.

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