A key measure of manufacturing activity in China has fallen below the 50-point boom-or-bust line for two months in a row. Domestic demand in the world's second-largest economy has stagnated amid a slump in the real estate market.

The Purchasing Managers' Index for November stood at 49.4, down 0.1 point from October. The National Bureau of Statistics conducts a survey on 3,200 manufacturers to compile the index. Figures above 50 represent growth, and those below show contraction.

Factories are receiving fewer orders because of the weak real estate sector and uncertainty over the job market. Sluggish export-related orders are another factor.

Among large companies, the index stood at 50.5. But the readings for midsize enterprises and small firms are both below the 50-point mark.

In October, the Chinese government decided to issue new bonds worth about 140 billion dollars to prop up the economy through infrastructure investment.

But the index highlights the fact that businesses remain cautious on the economic outlook.