Chinese manufacturing business activity continued improving in April, with an important index remaining in expansion territory, official data showed on Friday.

The manufacturing purchasing managers' index (PMI), a key measure of factory activity in China, posted at 50.1 in April, unchanged from 50.1 in March and up from 49.9 for February, according to data compiled by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.The NBS manufacturing PMI samples 3,000 enterprises of various sizes nationwide.

Zhao Qinghe, a senior analyst with the NBS, said China's manufacturing PMIs in the last three months were lingering around the expansion/contraction threshold but some PMI sub-indices in April have shown encouraging signs.

The production sub-index posted at 52.6, the highest monthly reading since November last year, he said. The sub-index for raw material purchase prices remained below the threshold at 47.8, but it had continued rising notably since January this year, which stood at 41.9.

The sub-index for production and business activity expectations posted at 59.5, remaining in the range of relatively good sentiment, Zhao said.

"Chinese companies are cautiously optimistic over China's economic growth prospects, thanks to a string of encouraging signals in both the Chinese and global economy and a price rebound in commodities such as oil," he said.

Zhao, however, admitted the downward pressure faced by China's manufacturing sector.

Domestic and global demand is still weak. The new orders sub-index posted at 50.2 in April, unchanged from March's reading, but was lower from those of previous years on a year-on-year basis. The sub-index for new export orders fell to 48.1, the lowest monthly reading since November of 2013.

Secondly, China's manufacturing sector is still in the phase of restructuring and destocking, and some traditional industries are still plagued by overcapacity, he said.

The sub-index for the finished goods inventory posted at 48 in April, down from 48.6 in March and remained below the threshold, NBS data showed.

Related story: Manufacturing activity rebounds during March,by Chen Jia, China Daily

Manufacturing activity rebounded in China during March, as factories accelerated production after the Chinese Lunar New Year holidays, encouraged by further policy easing expectations.

The manufacturing Purchasing Managers Index climbed to 50.1 in March, up from 49.9 in February and 49.8 in January, the National Bureau of Statistics said on Wednesday.

Further indication of the pickup in the sector was evident in the robust sub-indexes with output and market expectations surging to a new high, as the government wielded policy tools to combat the economic slowdown.

Policymakers decided to cut the minimum down payment for second-home buyers on Monday to spur the real estate market, in line with the initiatives announced earlier to boost infrastructure construction investment, efforts to reduce business taxes, and steps to lower the benchmark interest rates.

Zhao Qinghe, an economist at the NBS, said that the manufacturing industry is still facing downward pressure, citing weak new orders and the contraction in exports.

"The post-holiday PMI recovery in March is modest compared with historical data," said Zhao. And this could lead to weaker economic growth in the first quarter of the year, compared with the 7.3 percent growth seen in the fourth quarter of 2014.

The NBS also released the services PMI, showing a slightly weaker reading of 53.7 in March, down from 53.9 in February. According to the official data, employment in both the manufacturing and non-manufacturing sectors continued to contract.

Lian Ping, chief economist at Bank of Communications Ltd, said that the manufacturing industry has been unable to provide enough job opportunities due to the sectoral weakness.

"The services sector must provide the much-needed growth in new jobs," said Lian, who expects the overall economy to rebound in the second quarter of this year.

A separate report jointly released by HSBC Holdings Plc and Markit Ltd showed a manufacturing PMI of 49.6 in March, down from 50.7 in February, back below the neutral level of 50 as the sector continues to struggle to gain growth traction.

Annabel Fiddes, an economist at Markit, said: "The latest data show that domestic and foreign demand remains subdued amid weaker market conditions, which dampened output growth as a result."

She said that employment in the sector continued to decline as many factories resorted to downsizing.

"Despite the sustained fall in the cost burden, any savings were generally passed on to clients as part of attempts to attract new business, suggesting a further squeeze on profit margins," said Fiddes.

Tom Orlik, chief North Asia economist of Bloomberg, expected the central bank to further cut interest rates and reserve requirement ratio in the second quarter to stabilize growth and ensure job growth.

"The combination of slowing growth and tight policy is not sustainable," he said. "The first-quarter GDP data, slated for publication in mid-April, could be the catalyst for further action."