China's Manufacturing Sector Growth Slows Marginally In June

China's manufacturing sector continued to expand in June but the pace of growth slowed from May, survey data from IHS Markit showed Monday.

The factory Purchasing Managers' Index fell marginally to 51.0 in June from 51.1 in May. The score was forecast to remain unchanged at 51.1.

The health of the sector has strengthened in each of the past 13 months, with the latest improvement broadly in line with the historical trend, Markit noted.

The latest PMI readings suggest that the economy lost some momentum last month, Julian Evans-Pritchard, an economist at Capital Economics, said. With credit growth still cooling and US tariffs imminent, further weakness ahead is expected.

Survey data signaled a further increase in Chinese manufacturing production, with the rate of growth edging up to a four-month high. Nonetheless, the pace of expansion remained moderate overall.

Supporting the latest upturn in production was a sustained rise in new business. As was the case for output, the rate of growth was moderate and similar to those seen in the prior two months.

There was further reduction in workforce numbers in June. Lower headcounts were due to retirements, company downsizing policies and insufficient workloads.

On the price front, data showed that the rate of input price inflation picked up to the sharpest in five months. As a result, manufacturers raised their prices charged, and at the steepest rate since last September.

Finally, goods producers in China remained optimistic that production levels would rise over the next year. However, the level of positive sentiment was the lowest registered for six months, amid concerns of rising costs and stricter environmental policies.