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China’s private services sector moderates in growth in February

CHINA’S services activities in February expanded at the slowest pace in four months with companies being less optimistic, a private survey showed today.

The Caixin China General Services PMI, a gauge of operating conditions in mostly private service companies, dipped for the second consecutive month to 52.6 last month from January’s 53.1, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

The increase of new work was flat as in the past two months, while firms expressed a slightly weaker degree of optimism toward the business outlook compared with January, and job creation weakened slightly, the survey said.

“The Chinese economy continued to recover in February, but the expansion in services decelerated, though there was a pickup in manufacturing expansion,” said Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group. “The Chinese economy is expected to maintain the growth momentum throughout the first quarter of this year. But signs of weakening may emerge from the second quarter.”

He added that inflationary pressures seemed to have started to ease as price increases in both manufacturing and services continued to weaken.

Released on Wednesday, the February official non-manufacturing PMI, leaning toward the state-owned sector, also dipped 0.4 points from January, hurt by weaker construction activities due to low temperature and holidays.

However, expansion in manufacturing activities accelerated in February as the official PMI rose 0.3 points month-on-month to 51.6 and the Caixin PMI increased 0.7 points to 51.7.

Australia and New Zealand Banking Group said in a note that the strong manufacturing activities in the first two months may translate into year-on-year GDP growth of 6.7-6.8 percent in the first quarter, beating previous expectations.


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