For the sixth straight month, China's manufacturing activity, which is one of the major factors that determine the country's economic health, contracted in January, government data released on Monday showed.

According to the data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing, the country's purchasing managers' index (PMI) declined to 49.4 in January from 49.7 in December.

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A reading above 50 indicates expansion while a reading below means the factory activity in the country is slowing down.

The sub-index measuring production stood at 51.4, a 0.8 percentage point decline from December while the sub-index for new orders declined by 0.7 point to 49.5 in January.

According to the official Xinhua news agency, the January PMI reading marked the lowest level since August 2012, as the country continues to scramble for new growth engines.

Among the factors that contributed to the contraction of the country's manufacturing activity are the slowdown in the housing market and the industrial overcapacity.

But Zhao Qinghe, statistician at NBS, said the contraction can also be attributed to the upcoming Spring Festival, where factories are forced to slow down for the holidays.

China also has an ongoing campaign to address the country's excessive capacity, Zhao added.

Zhao was also quoted by Xinhua as saying that the China's manufacturing activity is also hit by the economic slowdown at home and abroad.

Last December, the PMI showed signs of picking up although it was still below the 50 threshold at 49.7. Economists said last month that the slight pick up in factory activity was a sign that the country's economy has stabilized.

However, the decline in the figure for January showed that China's economy continues to volatile as the government seeks to move to a consumption-based economy.

TagsChina PMI, China economy, China Factory