China’s manufacturing activity ticked up in June but remained in contraction territory, official data showed on Monday, as the truce in its trade war with the United States held.

The Purchasing Managers’ Index — a key measure of industrial output — came in at 49.7, according to the National Bureau of Statistics (NBS).

The figure was higher than May’s 49.5 and slightly above the 49.6 estimated by a Bloomberg pool of analysts.

However, it fell below the 50-point mark separating growth and contraction for the third straight month.

China’s “economic prosperity level remained expansionary overall” in June, NBS statistician Zhao Qinghe said in a statement.

“Manufacturing production activity accelerated, and market demand improved,” Zhao said.

Zichun Huang, China economist at Capital Economics, said the June figures “suggest that China’s economy regained some momentum, supported by a rebound in manufacturing and construction”.

“But we remain cautious about the outlook, as weaker export growth and a fading fiscal tailwind are likely to slow activity in the second half of the year,” Huang said.

China’s economy has struggled to sustain its post-pandemic recovery as it battles a prolonged debt crisis in the crucial property sector, chronically low consumption and elevated youth unemployment.

It has also been hit by a fusillade of import tariffs unleashed by US President Donald Trump since the start of the year.

However, Beijing and Washington called a truce on the staggeringly high duties in May, and Trump said on Sunday that the United States was “getting along well with China”.

AFP