(Yicai) July 1 -- Activity in China's manufacturing sector remained in contraction territory in June after shrinking unexpectedly in May, according to the latest official data.

The manufacturing purchasing managers' index came in at 49.5 last month, unchanged from May, the National Bureau of Statistics announced yesterday. It was 50.4 in April and 50.8 in March, after shrinking between last October and February. A reading below 50 indicated contraction.

The new orders sub-index inched down to 49.5 from 49.6 in June from the month before, indicating that market demand remained weak. The production sub-index fell to 50.6 from 50.8 but remained above the threshold, showing that companies continued to expand their production.

The sub-index for expectations on production and operations rose to 54.4 from 54.3, as manufacturing companies kept stable expectations about the market's future development.

Services PMI

The non-manufacturing PMI dipped to 50.5 in June from 51.1 in May, the NBS data also showed. The expansion in the non-manufacturing sector continued to shrink but remained in expansion territory for the 18th consecutive month.

The service sector's business activity index fell to 50.2 from 50.5 in the period, indicating a decline in confidence in the service sector. The construction activity sub-index plunged to 52.3 from 54.4.

The composite PMI output index, which is the weighted sum of the manufacturing production sub-index and the non-manufacturing PMI, fell to 50.5 from 51 last month from the previous one. This indicates that the Chinese economy continued to expand, but the foundations for sustained development still need to be consolidated, said Zhao Qinghe, a senior statistician at the NBS.

Editor: Futura Costaglione