(Yicai Global) Sept. 3 -- China's manufacturing sector posted its slowest growth in 14 months despite remaining in positive territory, the country's latest Caixin China General Manufacturing Purchasing Manager's Index reveals.

The seasonally adjusted PMI reading came in at 50.6 for August, down from 50.8 in July. Although the value still remains above the 50.0 growth threshold, it is indicative of an overall slowing in expansion that has not been seen since June last year, according to data released by market research institute IHS Markit.

This reading is inconsistent with that of China's own official data. The country's National Bureau of Statistics PMI reading came in at 51.3 for August, representing a 0.1 percentage point expansion on the month.

"Generally speaking, the manufacturing sector continued to weaken amid soft demand, even though the supply side was still stable," said Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group, in a research note. "In addition, the worsening employment situation is likely to have an impact on consumption growth. China's economy is now facing relatively obvious downward pressure."

China's manufacturing operations continued to grow in August, IHS Markit's index found, while output continued to expand and accelerated compared with July. The growth rate of new orders slumped to its lowest level since May last year and export sales declined for the fifth consecutive month. Employment continues to shrink resulting in an increase in backlog work while inflationary pressure is on the rise.

In terms of prospects for production, confidence in the industry still hovers around the six-month low set in June. Despite expected increases in customer demand, many respondents expressed concern over the lingering China-US trade spat and relatively sluggish market conditions.

Overall, the manufacturing boom continued to weaken in August and the demand side showed a sharp contraction, while production indicators remained stable.

The fiscal policy expectations and the environmental protection were still supported by industrial product prices.

Markit IHS believes that under the drag of demand, stability on the production side will be difficult to sustain, and the deterioration of employment will further threaten consumption growth. The economy faces relatively obvious downward pressure.

Editor: William Clegg