BEIJING - China's economic output continued to grow in July as the business outlook remained optimistic, but seasonal factors including heat waves and floods somewhat dragged down the expansion.

According to the purchasing managers' index (PMI) released Wednesday by the National Bureau of Statistics (NBS), the composite PMI output index stood at 50.2 this month, mildly down from 50.5 in June. The manufacturing PMI inched down to 49.4, and the PMI for the service and construction sectors combined retreated to 50.2.

A PMI reading above 50 indicates expansion, while a reading below 50 reflects contraction.

Commenting on the data, NBS senior statistician Zhao Qinghe said business activities saw a slowdown in expansion.

The manufacturing sector registered a slightly lower business climate due to unfavorable factors including the traditional slack season, insufficient market demand, and extreme weather conditions, he said, adding that high temperatures and floods also dampened the construction sector.

Despite the headwinds, most enterprises still held a positive outlook on the market trend, the data showed.

ALSO READ: China prioritizes economic structural reform to further deepen comprehensive reform

The sub-index on business expectations came in at 53.1, 56.6 and 52.9 for manufacturers, service providers and construction companies, respectively. In particular, the pharmaceuticals, the railway, ship and aerospace equipment, and the electrical machinery saw their expectation indexes at 57 or above, indicating strong optimism.

The PMI for the non-manufacturing sector revealed that the service sector sub-index reading stood at 50 in July, down from 50.2 in June, according to the NBS.

Services related to railway transport, air transport, postal services, culture, sports and entertainment sectors saw rapid growth in July, while those related to retail, capital market services and property sectors logged contraction.

The sub-index for the construction sector was 51.2 in July, down from 52.3 in June. NBS senior statistician Zhao attributed the moderation to adverse factors including heat waves, rainstorms and floods around the country, which disrupted the progress of construction projects.

READ MORE: CPC leadership sets out economic priorities for second half of 2024

The reading for the construction sector's business expectation stood at a high level of 52.9, indicating that the majority of construction companies maintain an optimistic outlook concerning future industry development, according to Zhao.