BEIJING • China's service sector expanded at a faster clip last month as new business orders picked up, a private business survey showed yesterday, pointing to renewed strength in a key part of the world's second-largest economy.
An official gauge of the non-manufacturing sector published last week also showed continued expansion in the service sector, though the pace was slower than in July, bolstering views that China's economy remains on solid footing.
The Caixin/Markit services purchasing managers' index (PMI) rose to 52.7 last month - the highest reading in three months - from 51.5 in July. New business expanded at the fastest pace in three months with a reading of 53.1 last month, while companies also hired the most workers in four months.
A reading above 50 indicates growth, and any lower than that signals contraction.
The Caixin index for factory activity last month was 51.6, the highest in six months.
China is counting on services, particularly high value-added services in finance and technology, to lessen the economy's traditional reliance on heavy industry and investment.
Government statistics show the service sector, accounting for just over one-half of China's economy in the first half of this year, grew 7.7 per cent in that period from a year earlier, easily outpacing overall GDP growth of 6.9 per cent.
But prices charged fell for the first time since March last year while input price inflation picked up last month from July as companies said competition intensified.
Caixin's composite manufacturing and services PMI, also released yesterday, rose to 52.4 last month from 51.9 in July and was the highest in six months.
"The recovery in both manufacturing and services has led the economic outlook to continue to improve," Mr Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said in a note accompanying the data release. "But we need to closely watch whether the recent rises in input costs will weigh on corporate profits and fuel inflation," Mr Zhong added.
The uptick in China's economy bodes well for the country's leadership ahead of a once-every-five- years Communist Party congress, which will open on Oct 18.
REUTERS
