The purchasing managers' index (PMI) for China's manufacturing sector remained stable at 49.4 in June, flat with that in May, the National Bureau of Statistics (NBS) said Sunday.
A reading above 50 indicates expansion, while a reading below reflects contraction.
The sub-index for production, a major factor used in calculating PMI, edged down 0.4 points to 51.3 in June, while the sub-index for new orders went down to 49.6.
"Still, production continued expansion on the whole and industry upgrades proceeded," NBS senior statistician Zhao Qinghe said. "Among the 21 sectors surveyed, 13 posted readings of expanding production."
The production sub-index for high-tech manufacturing, equipment manufacturing and consumer goods industries posted monthly increases, Zhao said when elaborating on the economic indicator.
Market sentiment remains stable as the sub-index for business expectation stood at 53.4 in June, he said.
Sunday's data also showed that China's non-manufacturing sector remained steady in June, with a PMI reading of 54.2.
The non-manufacturing PMI has remained above 54 for 6 months in a row, pointing to relatively high-level of expansion and stabilizing development in the sector, Zhao said.
Wen Tao, an analyst with the China Logistics Information Center, attributed the slowdown in market demand growth to monthly factors, such as heavy rainfalls in southern regions, the Sichuan earthquake and continuous high temperatures in northern parts of the country.
PMI readings in the first half of the year (H1) pointed to the downward pressure on the manufacturing sector, but the broader economy will remain steady in H2, Wen said.
Favorable factors include improving economic performance in H1 and the stable growth in sectors of high-tech manufacturing, equipment manufacturing and consumer goods.
"There are many expansionary policies and stronger counter-cyclical adjustments," Wen said. "We will continue to see the effects of policies to cut taxes and fees, stabilize investment and the financial sector on providing strong support for structural adjustment, efficiency improvement and growth."