(Yicai Global) June 30 -- China's purchasing managers' index for manufacturing, a gauge of factory activity, and that for non-manufacturing, which assesses the service sector, both dipped in June from the month before but stayed above the benchmark of 50, indicating expansion, according to the latest figures.

The manufacturing PMI declined 0.1 percentage point in June from May to 50.9, according to data released today by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. While the non-manufacturing PMI slid 1.7 point to 53.5. Both remain above the boom or bust level, showing sustained recovery.

The composite PMI index, an indicator of economic activity in both the country’s manufacturing and non-manufacturing sectors, dropped 1.3 point this month to 52.9, indicating that the overall production and business activities of Chinese enterprises have slowed down.

The manufacturing PMI sub-indices showed that the surge in raw material prices has slackened, helping to prop up demand. The purchasing price sub-index dropped 11.6 points from May to 61.2, while the proportion of companies reporting high raw material costs fell by 3.7 points to 61.1. In turn, the ex-factory price sub-index sank 9.2 points to 51.4.

However, market demand still needs to be consolidated and corporate profit margins will continue to be under pressure for some time, said NBS Senior Statistician Zhao Qinghe.

The new orders sub-index edged up 0.2 point to 51.5. It has now stayed above 51 for 13 consecutive months. The employee sub-index rose by 0.3 point to 49.2.

In the service sector, the business activity sub-index was down 2 points to 52.3, the NBS said. The business activities expectation sub-index was 60.4, higher than in recent years, reflecting an abundance of optimism.

The construction sector was stable, with the business activity sub-index at 60.1, the same as in May. The readings have stayed in a high prosperity range for two consecutive months, indicating rapid growth, Zhao said.

Editor: Kim Taylor