China’s manufacturing may contract at a slower pace in July after two interest-rate cuts and a rebound in lending spurred demand in the world’s second-largest economy, a private survey indicated.

The preliminary reading was 49.5 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics. If confirmed, that would be the highest since February. In June, the final number was 48.2.

A slowdown triggered by weakness in exports, a crackdown on housing speculation and past monetary tightening has sent Chinese stocks to their lowest level since 2009. Standard Chartered Plc estimates expansion will rebound to above 8 percent this quarter after sliding to 7.6 percent in the April- June period.

“Earlier easing measures are starting to work,” Qu Hongbin, Hong Kong-based chief China economist for HSBC, said in a statement. “That said, the below-50 July reading implied demand still remaining weak and employment under increasing pressure. This calls for more easing efforts to support growth and jobs.”

A final reading below 50 would cap a nine-month run, the longest in the index’s eight-year history and surpassing the stretch from August 2008 to March 2009.