* July official factory PMI 51.2 vs poll 51.3, June 51.5
* July services PMI 54.0 vs June 55.0
* Activity hurt by trade friction, rain and high temperatures - official (Adds economist comment, information on performance of small and large firms)
BEIJING, July 31 (Reuters) - Growth in China's manufacturing sector slowed more than expected in July, as the worsening trade dispute with Washington, bad weather and weaker domestic demand weighed on factory activity.
The official Purchasing Managers' Index (PMI) released on Tuesday fell to 51.2 in July, from 51.5 in June and below the 51.3 in a Reuters poll of economists. It was also the lowest index reading since February but remained above the 50-point mark that separates growth from contraction for a 24th straight month.
Firms were hurt by trade frictions, rain and high temperatures in July, which is also a cyclically slow season for some sectors, said statistics bureau official Zhao Qinghe in a statement released with the data.
The gauge of factory activity is the first major reading of the world's second largest economy since the second quarter of this year, when China logged a modest slowdown in growth, weighed by government efforts to tackle debt risks and escalating U.S. trade tensions.
ANZ Senior China Economist Betty Wang said while trade tensions were a factor in the moderation in growth, the ongoing deleveraging campaign and unfavourable weather were bigger drivers behind the slowdown.
The PMI's July new export orders index remained in contraction in July, but did not change from the previous month's reading of 49.8, a sign trade conditions have not worsened significantly.
However, the sub-index on imports, viewed as a proxy for domestic demand, dipped into contraction in July and was the lowest since February.
"Recent economic policy adjustments are partly meant to address the downside risks in the economy," Wang wrote in a note.
"While this is likely to lift domestic sentiment over the medium term, we are mindful of whether China will shift back to pump-priming the economy."
Beijing and Washington have been engaged in a tit-for-tat exchange of punitive measures and threats of measures against each other's goods.
Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. China promptly responded by levying taxes on the same value of U.S. products, leading U.S. President Donald Trump to threaten tariffs on $500 billion of Chinese goods.
China's June exports growth cooled slightly from the previous month but remained solid, as exporters rushed to move shipments before tariffs went into effect on July 6.