HONG KONG, China (PNN) - August 1, 2012 - Manufacturing conditions in China offered glimpses of improvement in July as recent interest-rate cuts appeared to support the economy in a weak external climate, but data suggested further monetary easing may be needed to sustain the recovery.

The result of two separate surveys of manufacturers - released Wednesday by banking major HSBC and the government-sponsored China Federation of Logistics and Purchasing (CFLP), respectively - showed employment and exports as the weak spots for factories in the world’s second-largest economy.

HSBC’s final purchasing manager index (PMI) for July came in at 49.3, up from 48.2 in June, but still below the 50-point threshold that divides expansion from contraction. The final result fell short of the survey’s preliminary reading of 49.5, released late last month.

“Final manufacturing PMI confirmed only a modest improvement of manufacturing conditions, thanks to the initial effect of the earlier easing measures,” said Hongbin Qu, co-head of Asian economic research at HSBC.

He said the weakened pace of decline in manufacturing was “far from inspiring,” as external markets continued to deteriorate, adding that more monetary easing was required to support economic growth and employment.

Meanwhile, official CFLP data put the July PMI at 50.1, above the 50-point mark but below the 50.2 level seen in June, as well as the 50.4 reading anticipated in a Dow Jones Newswires survey of economists.

That survey also showed that output was improving, but new orders in the pipeline, including those from overseas, contracted more in July than they did in the previous month.

Official data also led analysts to conclude that Beijing needed to further relax its monetary policy.