(Yicai Global) July 4 -- Last month's Caixin China General Manufacturing Purchasing Manufacturers' Index (PMI) was 50.4 after a slight May slowing, showing manufacturing industry improvement, per figures outed yesterday.

This trend coincides with the official PMI, where in both a reading over 50 signals expansion, while one below shows contraction.

The official PMI rose 0.5 percentage points from May to 51.7, the second highest year to date, National Bureau of Statistics data indicates.

Buoyant manufacturing industry sentiment last month caused inventory to rebound, but an economic downturn may be expected later, said Zhong Zhengsheng, chief economist at CEBM Group Ltd., a macroeconomic and equity research subsidiary of Caixin Insight Group.

A flicker of new orders drove June's Caixin PMI. Though these grew modestly, this was nonetheless the fastest in three months. New business from overseas markets swelled somewhat in the month, but manufacturers surveyed said demand both at home and abroad was still flaccid.

Manufacturers efforts to slash costs and boost efficiency in part kept employment shrinking in June, but it contracted at the slowest rate since March.

The average investment cost in China's manufacturing industry rose marginally last month, ending a slight dip in May.