BEIJING, July 1 Reuters Factory activity among smaller Chinese manufacturers grew at the fastest pace since 2021 thanks to overseas orders, a private index showed, even as a broader survey indicated weak domestic demand and trade frictions had led to another industrial sector contraction.

The CaixinSP Global manufacturing PMI on Monday rose to 51.8 in June from 51.7 in the previous month, marking the fastest clip since May 2021 and surpassing analysts39; forecasts of 51.2.

The index, which mostly covers smaller, exportoriented firms, has remained above the 50point mark that separates growth from contraction for eight straight months.

It contrasts with a much broader official PMI released on Sunday that showed a decline in broader manufacturing activity in June, the second straight month of weakness. Activity in the services sector plumbed a fivemonth low.

The Caixin PMI survey showed manufacturing output growth hit a twoyear high in June. The orders index, including the overseas orders index, remained in expansionary territory last month, albeit at a slower rate.

Demand for consumer and intermediate goods was stronger than that for investment goods, said the survey.

China39;s exports exceeded forecasts in May, but analysts said the jury is still out on whether export sales are sustainable on top of recent trade tensions.

The PMIs for June were mixed, but on balance suggest that the economic recovery lost some momentum last month, Zichun Huang, China Economist at…