The Purchasing Managers' Index (PMI) for China's manufacturing sector stood at 52.1 percent in June, down 1.8 percentage points from last month, the China Federation of Logistics and Purchasing (CFLP) said Thursday.

The PMI includes a package of indices to measure manufacturing sector performance. A reading above 50 percent indicates economic expansion, and below 50 percent indicates contraction.

It was the 16th straight month that the index was above 50 percent.

The index hit a record low of 38.8 percent in November 2008 when the global financial crisis started to weigh on China's economy. The last time the index fell below 50 was February last year.

According to the CFLP, 10 sub-indices such as production, new orders and purchasing prices all fell, but the overstock index was up.

The PMI index slowed for the second consecutive month, indicating a moderation in the pace of China's manufacturing expansion because of the country's macro regulation policies and slowdown in global economic recovery, the National Bureau of Statistics (NBS) said in a statement on its website.

"Since the PMI is based on firm-level surveys, the draconian property tightening measures in China and the European debt crisis could weigh on manager sentiment, which might in turn impact the survey results," said Lu Ting, China economist of the Bank of America-Merrill Lynch, in a client e-mail note.

"The reading of the June index indicates China's economic growth is at a key stage turning to stabilization. The foundation for a new round of sustainable growth is forming, which needs to be consolidated," said Zhang Liqun, a researcher with the State Council's Development Research Center.

China's gross domestic product (GDP) surged 11.9 percent year on year in the first quarter, accelerating from 10.7 percent in the last quarter of 2009.

Major economic data, including China's GDP growth for the second quarter and June inflation and industrial production, are due to be released on July 15, according to the NBS preliminary schedule.

Premier Wen Jiabao said early this week that the national economy was developing in the expected direction, and the government would maintain the continuity and stability of macro economic policies to consolidate the growth momentum.