(Yicai Global) April 1 -- China's manufacturing sector snapped a three-month contraction in March, returning to positive territory as factories got back to work after the Chinese New Year holiday and lower taxes kicked in.

The manufacturing purchasing managers' index rose 1.3 percentage point to 50.5 last month, according to data from the National Bureau of Statistics. A number above 50 indicates expansion.

Supply and demand have picked up as the government is cutting taxes and fees to support the real economy, said Zhao Qinghe, a senior statistician of at the NBS.

The production sub-index jumped 3.2 points to 52.7, while that for total new orders, a leading indicator, rose 1 point to 51.6. Both categories logged a six-month high as they accelerated for a second consecutive month.

Corporations bought more. The purchase volume index inched up to 51.2. But importers and exporters remained in contraction territory at 48.7 and 47.1, respectively.

As companies were more willing to buy, price indexes rose, Zhao said. Prices for raw materials rose 1.6 point to 53.5. Those for products leaving a production plant, also known as the ex-factory price index, climbed 2.9 points to 51.4.

The composite PMI, which measures the output for both manufacturing and services, moved 1.6 point higher to 54.

Economic activity beyond manufacturing grew steadily, according to Zhao. The non-manufacturing business activity index stood at 54.8, up 0.5 point. In the first quarter, this gauge of activity outside factory gates was 54.6, or 0.9 point higher than during the fourth quarter of 2018. 

The business activity index for construction jumped 2.5 points to 61.7 as property developers resumed work after the holidays. That for the service sector stood almost still, climbing just 0.1 point, to 53.6.

Editor: Emmi Laine