China's factory activity expanded modestly for a second straight month in November, an official survey showed, adding to a string of recent data suggesting stimulus measures are having an impact on the world's second-largest economy.

The National Bureau of Statistics purchasing managers' index (PMI) on Saturday rose to 50.3 - a seven-month high - from 50.1 in October, above the 50-mark separating growth from contraction and beating a median forecast of 50.2 in a Reuters poll.

Two months of positive PMI readings suggest the stimulus announcements are improving sentiment on factory floors.

"The economy stabilized recently as fiscal and monetary policies eased after the Politburo meeting on September 26. But the outlook for 2025 remains unclear," said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

The PMI report showed total new orders expanded for the first time in seven months in November, while new export orders contracted for the seventh consecutive month.

The PMI index continued to rise in November, indicating more obvious signs of recovery at the bottom of the economy. The effect of policies in boosting business confidence is becoming stronger," said Zhang Liqun, an analyst at the China Logistics Information Center.

However, "insufficient demand is still a major constraint on enterprise production activities," said Zhang. "It is necessary especially to strengthen the effective driving of government public investment on enterprise orders."

The non-manufacturing PMI, which includes construction and services, fell to 50.0 this month, after it rose to 50.2 in October. Activity in the services sector expanded modestly for a second month in a row.

The private sector Caixin factory survey will be released on Monday and analysts expect its reading to edge up to 50.5.

Earlier this month, China unveiled a 10 trillion yuan debt package to ease municipal financing strains. That followed China's central bank in September introducing its biggest stimulus since the pandemic to pull the economy back towards the governments growth target of around 5 percent.

China's official November composite PMI, which includes both manufacturing and services activity, remained at 50.8 in November. (Reuters)