China's purchasing managers' index (PMI) for the manufacturing sector came in at 49.4 in August, up from 49 in July, data from the National Bureau of Statistics (NBS) showed Wednesday.

The business climate of most manufacturing industries improved in August, with 12 of the 21 industries surveyed improving their PMI, said Zhao Qinghe, a senior NBS statistician, on the NBS's official website.

Non-manufacturing industry activities continued to grow for the third consecutive month, although its PMI was down at 52.6 in August from 53.8 in the previous month.

A PMI reading above 50 indicates expansion in activities, while a reading below reflects contraction.

Zhao said China's economy had continued to recover despite unfavorable factors such as the COVID-19 resurgence and record heat waves.

Due to these reasons, the recovery of the service sector slowed in August. The index of its business activities fell by 0.9 points from last month to 51.9, but remains in the expansion range.

"The resurgence of COVID-19 has suppressed the service sector," said Zheng Yuchi and Zhang Wenlang, analysts at China International Capital Corporation in a note sent to CGTN.

Read more: China heatwave: Industrial firms shut down in Sichuan to save power

According to the NBS, the sub-index of consumer goods production rose 0.9 points from July to 52.3 this month thanks to the implementation of various pro-consumption policies and measures.

Meanwhile, business activities in the construction sector have continued to expand. This month's PMI stood at 56.5, driven by rapid progress in infrastructure construction and market demand growth, said Zhao.

"Insufficient demand is still the economy's biggest problem," said Zheng and Zhang. "The recently announced policy packages to stabilize the economy may continue to compensate for insufficient demand for some time."