The Purchasing Managers' Index (PMI) of China's manufacturing sector stood at 53.3% in July, according to a release by the China Federation of Logistics and Purchasing on Saturday.

The figure was up 0.1% point from June, which was up 0.1% from May. A reading above 50 suggests expansion, while one below 50 indicates contraction. As can be seen from the chart below, after hitting the bottom in last November, the index has moved upward and stayed above 50 for 5 consecutive months.

The PMI includes 5 weighted sub-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.

Compared with last month, only the import indicator kept dropping by another 1%.  All the other indicators showed small increase of less than 1%, except the purchasing price indicator climbed 2.1%. The new orders indicator remained flat as last month at 55.5%, the export orders indicator increased 0.7% to 52.1%, production indicator added 0.2% to 57.5%, and the employment indicator rose 0.7% to 50.8%.

"The reading of the July index indicates that China's economy kept the upward trend, and was consistent with other economic indicators from the first half. With the boost of domestic demand, it is expected that the economy will maintain the upward trend.  The PMI index correctly predicted the turning point of our economy.  With more and more data collected, it can be expected that this indicator will become more and more important," said Zhang Liqun, a researcher with the Development Research Center of the State Council.