Markit's Purchasing Managers' Index (PMI) for manufacturing, which accounts for about 10 percent of the economy, rose to 52.2 from 50.5 in July, its highest print since August 2008.
The reading was above the 50 line that separates growth from contraction but slightly lower than the flash reading of 59.4.
The strongest euro exchange rate in two and a half years did little to dent demand for French-made goods as the flow of new orders and backlogs of work grew, the survey showed.
China's factory activity gathered steam in August, official data showed on Thursday, beating expectations, but not dispelling concerns about the headwinds facing the world's second largest economy.More news: Florida suspends 2 more for MI game, including leading rusher
"The Caixin China General Manufacturing PMI rose 0.5 points to 51.6 in August, the second-highest reading of this year so far".
A rebound in manufacturing sector bodes well for a higher GDP growth rate in the current July-September quarter.
De Lima said, "All sub-sectors posted substantial recoveries, with capital goods outperforming its consumer and intermediate goods counterparts regarding growth rates for production".
In addition, the government's new tax policy - the Goods and Services Tax - has hurt both manufacturing and services firms by creating confusion over product pricing. Just under 31% of companies reported an increase in purchase prices, which they generally linked to the rising cost of commodities. "The drop in the output index indicates that manufacturing could act as a drag on the economy in the third quarter, with exports dampening order book growth".
It came as household spending slumped to its lowest level in almost three years following a slowdown in new vehicle sales and persistent pressure from higher inflation.