China's service sector growth slows

A restaurant in Beijing. Even though service sector activity in China did increase slightly last month, the rate of expansion was the slowest recorded in three months. The Caixin China General Services PMI slipped from 51.8 in April to 51.2 last mont
A restaurant in Beijing. Even though service sector activity in China did increase slightly last month, the rate of expansion was the slowest recorded in three months. The Caixin China General Services PMI slipped from 51.8 in April to 51.2 last month.PHOTO: AGENCE FRANCE-PRESSE

BEIJING • Last month saw a modest rise in China's service sector activity, with growth momentum easing further, a private gauge showed yesterday.

The Caixin China General Services Purchasing Managers' Index (PMI), produced by financial information service provider Markit and sponsored by Caixin Media, came in at 51.2 last month, down from 51.8 in April - the slowest rate of expansion in three months.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.

Last month, firms' optimism about this year's business outlook dipped to its lowest level for the year so far, the survey found, as uncertain economic prospects weighed on business confidence.

Growth in business activity, new orders and employment all weakened from the previous month.

The Caixin China General Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 firms.

The official PMI for China's non-manufacturing sector, which includes a combined service sector and the construction industry, came in at 53.1 for last month, down from 53.5 in April and 53.8 in March, but well above the 50-mark that separates expansion and contraction.

The data was jointly released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

Businesses related to wholesale, retail, aviation transport, catering and software technology posted sound growth last month. However, road transport, residential services and repairing industries reported a drop in business volumes.

XINHUA

A version of this article appeared in the print edition of The Straits Times on June 04, 2016, with the headline 'China's service sector growth slows'. Print Edition | Subscribe