BEIJING (REUTERS) - Growth in China's services sector retreated slightly in July, an official survey showed on Sunday, an indication that buoyant growth among Chinese factories has yet to fully filter through to the services industry.

The official Purchasing Managers' Index (PMI) for the non-manufacturing sector slowed to 54.2 in July from June's 55, the National Bureau of Statistics said.

A reading above 50 in PMI surveys indicates an expansion in activity while one below the threshold points to a contraction.

The services PMI followed two manufacturing surveys released on Friday that showed China's factory sector posting its strongest growth in at least 1-1/2 years last month, cementing bets that the economy is gathering steam after a spate of stimulus measures.

Yet despite the slight pull-back in the services PMI, other measures suggested companies remained confident.

Sunday's survey showed a sub-index for business expectations rose to 63.9 last month from June's 62.9.

The improving performance in the service industry is in line with a pick-up in the broader economy, where growth quickened to 7.5 percent in the second quarter from an 18-month low of 7.4 percent between January and March.

China has unveiled a slew of modest stimulus measures since April to energise the economy, including relaxing the reserve requirements for some banks and hastening the construction of railways and public housing projects.

The services sector, which accounted for 45 percent of China's gross domestic product in 2012 and roughly half of all jobs in the country, is expected to post steady growth in coming years as the economy matures.