SINGAPORE, Aug. 1 (Xinhua) -- Singapore's purchasing managers' index (PMI) contracted to 49.8 in July after two straight months' expansion, Singapore Institute of Purchasing and Materials Management said on Wednesday.

A reading above 50 signals an expansion in factory output, while a reading below 50 indicates contraction.

The institute said the decline was mainly due to lower new orders and slower growth in new exports.

In particular, the city-state's important manufacturing sector, electronics PMI, also saw a reading of 49.2 in July, a sharp decline from last month's 50.4.

The PMI in China slightly declined from June's 50.2 to 50.1 in July, according to the official data. However, the HSBC manufacturing PMI for China climbed to three months' high of 49.3.

Economists here expected China may recover from the constraction in manufacturing industry and may bring benefits for them.