China's manufacturing Purchasing Managers' Index came out Tuesday, the number edged up compared to February but is still weak from a year ago.

China's factory activity crept up slightly in March to 50.3 from February's 50.2. That's according to a National Bureau of Statistics report released Tuesday. The data wasn't enough to dispel concerns about an economic slowdown but the numbers did end three straight months of decline in the manufacturing sector. At the same time, new orders, employment and market confidence all increased in March.

"From the exports front, since last December, the new orders index had been under the 50-point threshold separating growth from contraction for three months. In March, it went back to 50.1, which indicated a recovery in manufacturing. Meanwhile, market confidence increased to 62.7 in the same month, reflecting the firms' confidence to the future," said Zhao Qinghe, senior statistician of National Bureau of Statistics.

"The employment index also performed well, showing a steadily increasing trend," said Cai Jin, Vice Chairman of China Federation of Logistics & Purchasing.

And thanks to policy support, the PMI index for small companies increased two consecutive months from February. But challenges remain. Rising labor costs and capital shortages are pressuring economic growth. Experts say the downward pressure is not tremendous but might push the government to provide more support in the future.