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

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

A PMI reading above 50 percent indicates expansion from the previous month, while below indicates contraction.

Taking account of seasonal factors, the index increased for two months in a row since it dropped 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.

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.