THE country’s factory activity remained stable in June, flat with that a month ago, an official survey showed yesterday.

The official Purchasing Managers’ Index (PMI) stood at 49.4 in June, unchanged from the previous month and below the 50-point mark that separates growth from contraction on a monthly basis.

Analysts polled previously predicted a reading of 49.5.

Many economists still expect the economy to face strong headwinds in the coming months as domestic demand falters and external risks rise.

In June, China’s factory output growth slowed, with the subindex falling to 51.3 from 51.7 in May while the contraction in total new orders accelerated to 49.6 from 49.8.

Export orders extended their decline with the sub-index falling to 46.3 from May’s 46.5, suggesting a further weakening in global demand.

While China’s exporters are feeling the pinch, yesterday’s data showed import orders also worsened, reflecting softening demand at home despite a flurry of growth-supporting measures rolled out earlier this year.

Analysts at Nomura expect any gains achieved on a temporary trade deal between China and the United States would prove fleeting.

To deal with the economic challenges, policymakers have released a range of stimulus and are expected to launch more. Premier Li Keqiang last week pledged to cut real interest rates on financing for small and micro firms.

Manufacturers continued to cut jobs in June, with the employment sub-index falling to 46.9, compared with 47 in May, when it hit the lowest level seen since March 2009.

An official business survey yesterday showed activity in China’s services sector held firm in June despite growing pressure on the broader economy from tougher U.S. trade measures.

The official non-manufacturing Purchasing Managers’ Index (PMI) fell to 54.2 from 54.3 in May, but stayed well above the 50-point mark that separates growth from contraction.

Services account for more than half of China’s economy, and rising wages have increased Chinese consumers’ spending power. But the sector softened late last year along with a slowdown in the economy.

The official June composite PMI, which covers both manufacturing and services activity, slipped to 53 from May’s 53.3.

(SD-Agencies)