(Yicai Global) July 3 -- Activity in China’s manufacturing sector slowed in June, but remained in positive territory for the second straight month, according to the findings of a widely watched private survey.

The Caixin manufacturing purchasing managers’ index came in at 50.5 in June, a slight drop from 50.9 in May, data released by financial media group Caixin showed today. A reading above 50 indicates expansion and one below shows contraction.

Yet the official manufacturing PMI, published by the National Bureau of Statistics on June 30, remained in contraction territory for the third straight month at 49, a gain of 0.2 percentage point from May.

The official gauge is compiled by the government and comprises 3,200 large firms, mostly state-owned, whereas the Caixin PMI tracks 650 businesses that are generally smaller and privately owned.

China’s factory output expanded modestly in June, with the pace of growth only slowing slightly from May’s rate, which was the fastest clip in 11 months, Caixin said.

Manufacturers remained cautious towards employment, which fell for the fourth month in a row, and confidence dipped to an eight-month low, as some firms expressed concerns over sluggish market conditions, according to the survey.

“A slew of recent economic data suggests that China’s recovery has yet to find a stable footing, as prominent issues including a lack of internal growth drivers, weak demand and dimming prospects remain,” said Wang Zhe, senior economist at Caixin Insight Group.

Stronger policy support is needed on the macro level, along with higher implementation efficiency from a micro perspective, to ensure that policies benefit market players directly and in this way bolster employment and market expectations, Wang said.

Editor: Kim Taylor