BEIJING (REUTERS) - Activity in China's manufacturing sector expanded at a faster pace than expected in March, adding to evidence that the world's second-largest economy is gaining momentum early in the year, an official survey showed on Friday.

The official Purchasing Managers' Index (PMI) rose to 51.8 in March, compared with the previous month's 51.6. It was above the 50-point mark that separates growth from contraction on a monthly basis. Analysts polled by Reuters had predicted a reading of 51.6, pointing to a solid expansion as China's industrial sector continued to benefit from higher prices and a recovery in demand fuelled by a construction boom.

Meanwhile, growth in China's services sector accelerated at the fastest pace in nearly three years, the survey showed.

The official non-manufacturing Purchasing Managers' Index (PMI) stood at 55.1, compared with the previous month's reading of 54.2, and well above the 50-point mark that separates growth from contraction on a monthly basis.

The reading was the highest since May 2014.

The services sector accounted for over half of China's economy last year and for the majority of its 6.7 percent growth as rising wages give Chinese consumers the opportunity to shop, travel and eat out more.

China's policymakers are counting on growth in services and consumption as they try to rebalance the country's economic growth model from a heavy reliance on investment and exports.