China's business climate index, a main gauge of macro-economic outlook, continued to fall in the first quarter, but the decline was much smaller than that for the previous quarter, the National Bureau of Statistics (NBS) said on Thursday.

The quarterly business climate index slipped from 107 at the end of last year to 105.6 in the first quarter this year, the NBS said. It was the third drop in a row as the deepening global financial crisis continues to hit the Chinese economy.

But the decline was much smaller than a drop of 21.6 points in the last quarter of 2008, according to the NBS.

The index ranges from zero to 200. A reading above 100 shows economic expansion, while a reading below 100 indicates contraction. The survey began in 1998.

The index for industrial sector rose from 98.5 to 99.8. The manufacturing sector was 98.4.

The index for the areas of transportation and postal service was up, but the service sectors edged down.

The entrepreneur confidence index, a gauge of the understanding, views and projections of business people, rose 6.5 points from three months ago to 101.1 in the first quarter.

The index reflects confidence in real estate, transportation, retail, information technology and software. In reflected decreased optimism in tertiary sectors including lodging and catering, according to the NBS survey.

A series of economic indicators have showed signs of recovery of the world's third largest economy. The industrial output rose 11 percent year on year in February, ending a sharp fall in January, for which the NBS did not provide the exact data.

There was also a decline in energy generation, a key indicator of the economic health. It slipped 0.71 percent from a year ago to 286.73 billion kilowatt hours of electricity in March, according to statistics released Wednesday by China National Power Dispatching and Communication Center (CNPDCC).

The Purchasing Managers' Index (PMI) of China's manufacturing sector rose for the fourth straight month in March to 52.4 percent, up 3.4 percentage points from a month earlier, the China Federation of Logistics and Purchasing (CFLP) announced last week.

It was the first time the PMI rebounded above 50 percent since July 2008, when the index fell to 48.4 percent.

A reading of above 50 suggests expansion, while one below 50 indicates contraction.

"The continuous rebound of the PMI not only shows the government economic stimulus package has begun to take obvious effect, but also indicates a stabilizing and warming economy," said NBS head Ma Jiantang.

(Xinhua News Agency April 9, 2009)