(Bloomberg) — China’s manufacturing sector continued to expand in December, providing some relief to Beijing as the world’s second-largest economy continues to struggle with a property market slump. 

The official manufacturing purchasing managers’ index rose to 50.3, beating the median estimate of 50, the National Bureau of Statistics said Friday. Non-manufacturing indicators, which measure activity in construction and service sectors, rose to 52.7. This is higher than the consensus forecast. This is the mark that separates expansion and contraction. 

China’s economy is facing rising pressure on multiple fronts, with policy makers announcing a shift in focus to stabilizing growth next year with “proactive” policies. However, the housing market is still struggling, local government finances are being hit by weak land sales and there has been a series of recent Covid-19 outbreaks, including one which caused authorities to lockdown the city of Xi’an. 

Friday’s data showed China’s economy maintained its recovery trend, Zhao Qinghe, senior statistician at the NBS, said in a statement. According to Zhao Qinghe, the PMI for manufacturing climbed again in February as commodities prices declined significantly. However, cost pressures at some companies have eased. 

Insufficient demand is still a major problem for manufacturers. More than 39% of the surveyed companies said they face such issues, indicating “the problem of shrinking demand is still prominent,” Zhang Liqun, a researcher with the State Council’s Development Research Center, said in a statement released by the China Federation of Logistics and Purchasing.

China’s need to stabilize its trade relations next year was reflected in subdued new orders and worsening export orders. Zhao explained that the subindex of construction activity fell to 56.3 as a result of the approaching holiday season and colder weather. 

The property downturn continues to dampen sentiment and slow down construction activities, and government pressure on local governments to borrow and spend isn’t yet having much effect in boosting investment and construction. 

Bloomberg’s earliest indicators showed that, while overall the economy is stable, it was clouded by the weakening of the real estate sector and slower external demand. 

The PMI data also contains key points:

• The sub-index of manufacturing jobs rose by 49.1, while the non-manufacturing workforce grew to 47.6
• Manufacturers saw less price pressure in this month, with output and input prices declining.
• Sub-indexes that track large and middle manufacturers rose, while those for small companies fell.

Updates starting at 5th paragraph.

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