The Purchasing Managers' Index (PMI), a barometer of manufacturing activities, reached 54.7 percent in October, up 0.9 percentage points from last month, said the China Federation of Logistics and Purchasing.

October's figure marked the 20th straight month that the index was above 50 percent. The PMI includes a package of indices to measure manufacturing sector performance. A reading above 50 percent indicates economic expansion.

The PMI's increase signals that the economic slowdown from torrid growth earlier this year will be mild, said Zhang Liqun, a senior researcher at the Development Research Center under the State Council.

Lu Ting, an economist from Bank of America-Merrill Lynch, said that the PMI's rebound since July, after declining for a few months beginning in April, shows the limited impact of the property tightening measures on developers' construction activities, and the government's big push on public housing.