China’s services growth slows in December
BEIJING: China's services sector expanded at a slower pace in December following a strong rebound in the previous month, with business confidence falling to the second lowest on record despite a pickup in new orders, a private survey showed yesterday.
The more downbeat reading suggests services companies remain cautious about the outlook for China's economy despite a flurry of stimulus measures, signs of improvement in the manufacturing sector and a long-awaited US-China trade deal.
The services sector accounts for more than half of the economy.
The Caixin/Markit services Purchasing Managers' Index (PMI) slowed to 52.5 last month from 53.5 in November, but was still higher than an eight-month low hit in October.
The index has stayed above the 50-point margin that separates growth from contraction on a monthly basis since late 2005.
The cooling trend in the private survey echoed that in the official non-manufacturing PMI, published by the National Bureau of Statistics of China, which fell from November's eight-month high.
Beijing has been counting on a strong services sector to cushion a prolonged slowdown in manufacturing and investment and create jobs for workers laid-off in other areas. Economic growth has cooled to near 30-year lows amid sluggish demand at home and abroad.
"China's economy is likely to get off to a quick start in 2020, but it will still be constrained by limited demand for the rest of the year," director of macroeconomic analysis at CEBM Group Zhong Zhengsheng wrote in a note accompanying the Caixin PMI release.
Services companies surveyed expressed concerns over subdued economic conditions and a lack of staff, the Caixin survey showed.
Their expectations regarding the one-year outlook for business activity fell to the second-lowest level since the series began in 2005.
The pace of job creation was also more modest, with the employment sub-index hitting the lowest level since July. - REUTERS