BEIJING - Business activities in China's non-manufacturing sector steadily recovered in March due to rising market demands, the China Federation of Logistics and Purchasing (CFLP) said on Tuesday.

According to a statement issued by the CFLP, the non-manufacturing sector's Purchasing Managers Index (PMI), a key economic indicator, rose 0.7 percentage points from February to 58 percent.

A PMI reading above 50 percent indicates expansion from the previous month, while readings below this mark indicate a contraction.

Taking account of seasonal factors, the index increased for two consecutive months since it dropping in January.

"Activities in the non-manufacturing sector was active on the back of rising market demands, and the sector maintained the momentum of sound growth," according to the statement.

The figure came two days after the CFLP posted China's manufacturing PMI at 53.1 percent in March, the fourth consecutive monthly growth and the highest level since March last year.

All major sub-indexes under the non-manufacturing PMI rose in March, the statement said.

Cai Jin, vice chairman of the CFLP, said that the rises indicate that China's non-manufacturing sector has been steadily growing.

The service industry has served as the major contributor for the growth in the non-manufacturing sector, as both business activities and market demand have been growing for two consecutive months, according to Cai.

The service industry's business activities index stood at 57.1 percent last month, up 1.1 percentage points from February, while its new orders index rose 1.2 percentage points to 52.8 percent.

The sub-index for business outlook surged 2.8 percentage points to 66.6 percent, the highest since August 2011, signaling that enterprises in the sector are optimistic about future prospects of growth, the statement said.

"The positive views from enterprises show that the sector is basically sound," Cai added.

The sub-index for new orders rose 0.8 percentage points to 53.5 percent last month, slightly higher than the rise posted a month earlier.

The construction industry's new order index hit 56.3 percent as demand for the industry rebounded with the weather turning warm, the CFLP said.

It added that 30 percent of companies surveyed saw rising contracts for new construction projects last month.

The sub-index for charges increased 0.8 percentage points to 52 percent.

The index for intermediate input prices rose 1.2 percentage points to 60.2 percent, representing the fourth consecutive monthly rise.

The input prices for the transportation industry posted the largest gains, and may further surge if oil prices continue to increase, the statement said.

"Pressures of rising prices driven by costs are gradually emerging for China," said Cai.

China's rate of inflation rose at its lowest pace in 20 months this February, providing more room for the government to stimulate growth, according to data from the National Bureau of Statistics.

The consumer price index (CPI), a main gauge of inflation, increased 3.2 percent year-on-year in February, the bureau said.

It eased from a 4.5-percent rise registered in January, when the Chinese New Year shopping spree boosted retail prices.

The federation's non-manufacturing PMI is based on a survey of about 1,200 companies in 20 industries including transport, real estate, retailing, catering and software.