Beijing: China’s manufacturing business activity declined slightly in July from the previous month, barely avoiding a contraction last seen in February, official data showed on Saturday.

The manufacturing purchasing managers’ index (PMI), a key measure of factory activity in China, posted 50.0 in July, down from 50.2 in June, according to data compiled by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing.

Factory activities remained in expansion territory for a four-month period extending from March to June. July’s reading demarcates growth and contraction, Xinhua reported.

Zhao Qinghe, a senior NBS analyst, attributed the retreat to continued weakness in both domestic and overseas demand.

The production sub-index posted 52.4 last month, down from 52.9 in June. The sub-index for new orders came in at 49.9 in July, down 0.2 percentage points compared to June.

“The slight decrease was a normal fluctuation,” said Chen Zhongtao, an analyst at the China Logistics Information Centre.

Chen, however, played down the decline saying the fundamentals of the Chinese economy remains in good shape as employment is stable and companies are generally positive on business prospects.

The analyst added that domestic demand would witness growth for the rest of the year, as a slew of infrastructure projects are slated to be rolled out.

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