China’s services sector grows at slowest pace in seven months
BEIJING : China's services sector grew at its slowest pace in seven months last month despite a strong increase in new orders as operating expenses continued to rise, a private survey showed yesterday.
Services account for more than half of China's economy, providing a key buffer as persistent trade tensions with the US weigh heavily on the country's manufacturing sector.
The Caixin/Markit Services Purchasing Managers' Index (PMI) fell to 51.3 last month, the weakest since February, versus August's 52.1. It has stayed above the 50-point that separates growth from contraction on a monthly basis since late 2005.
The fall was in line with the marginal drop in the official non-manufacturing PMI published by the National Bureau of Statistics. It was also in step with signs of general cooling this year as China's economy continues to lose momentum.
New orders for services last month grew at the fastest pace since January last year, buoyed by product launches and stronger customer demand. But operating costs hit a one-year high because of growth in labour, fuel and raw material expenses.
A continued push among companies to stay competitive also limited the increase in prices.
The volume of new work from abroad received rose for the third straight month in September. But after seasonal adjustments, the pace of growth further eased from July.
Expectations regarding the one-year outlook for business activity softened slightly last month. But services firms added jobs at the fastest pace since January 2017.
Beijing has rolled out a mix of fiscal stimulus and monetary easing since early last year to cushion the slowdown.
Caixin's composite manufacturing and services PMI, also released yesterday, rose to a five-month high of 51.9 last month from 51.6 in August, though new export orders fell. - REUTERS