The Purchasing Managers' Index (PMI) of China's manufacturing sector stood at 54 percent in August, the China Federation of Logistics and Purchasing said Tuesday.

The figure was up 0.7 percentage points from July. The July index gained 0.1 percentage points from the previous month.

A reading of above 50 suggests expansion, while one below 50 indicates contraction.

The PMI includes a package of indices that measure economic performance. The survey, conducted by the National Bureau of Statistics, covers purchasing and supply managers in more than 700 firms across China.

The purchasing price index climbed 2.7 percentage points to 62.6 percent in August, the ninth monthly increase since December.

August output index was 57.9 percent, up 0.6 percentage points from a month ago. The new order index was 56.3 percent in August, up 0.8 percent from the previous month.

The new export order index was 52.1 percent, the same as the previous month. The import index rose to 51.3 percent, up 2.4 percentage points from July.

"The reading of the August index, which continued to rise slightly above 50, indicates the momentum of the country's economy will continue," said Zhang Liqun, a researcher with the Development Research Center of the State Council.

However, the government should closely watch the development of the PMI, as uncertainties over economic recovery still existed, he said.

(Xinhua News Agency September 1, 2009)