China July official factory PMI dips to 51.4; slightly below expectations

[BEIJING] Growth in China's manufacturing sector slowed in July but only marginally, reinforcing expectations the world's second-largest economy will cool slightly in coming months as borrowing costs rise and regulators clamp down on riskier types of financing.

The official Purchasing Managers' Index (PMI) released on Monday stood at 51.4 in July, down from the previous month's 51.7 but still well above the 50-point mark that separates growth from contraction on a monthly basis.

Analysts surveyed by Reuters had forecast the reading would come in at 51.6, little changed from June.

China posted stronger-than-expected economic growth of 6.9 per cent in the first half, fuelled by a year-long construction boom, resurgent exports and robust retail sales.

But economists have expected the pace to slow slightly in the second half due to higher financing costs, a regulatory clamp-down on riskier lending and some signs of moderating in the red-hot housing market.

REUTERS