Prices for goods at the factory gate in China jumped in March, the government said Wednesday, in a positive sign of strengthening demand for the world's second-largest economy.

The producer price index (PPI) rose 7.6 percent year-on-year in March, according to the National Bureau of Statistics, slightly beating economists' expectations of a 7.5 percent increase in a Bloomberg News survey.

Factory gate inflation "has eased", NBS analyst Sheng Guoqing said in a statement, noting that March's figure fell back from a 7.8 percent increase in the previous month after five months of expansion.

The consumer price index (CPI) rose 0.9 percent in the month, the data showed, beating a Bloomberg analysis that forecast a 0.8 percent increase.

The figures were affected by a drop in food costs, while prices for medical care, housing, education and entertainment, and transportation and communication have increased, Sheng said.

"Reflation is close to a turning point," Larry Hu, head of China economics at Macquarie Securities Ltd., told Bloomberg.

"From a longer perspective, the key question is how long the current up-cycle could run."

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