Index drops to lowest as services slow
By Wang Yanlin |
April 7, 2011, Thursday
|
Print Edition
Print Edition
THE business activity index of China's services companies fell to the lowest level since December 2008 in March, and companies complained about heavier costs and the government's tightening policies.
The HSBC Business Activity Index, a gauge of the services industry across the country, edged down to 51.7 in March from February's 51.9, the bank said yesterday.
The figure was much lower than the long-term average of 57.5, and was at a level indicative of only a modest rate of activity growth. A reading above 50 points to an expansion.
The survey found the cost of inputs rose to a four-month high in March. Respondents reported that prices of a wide range of inputs have risen during the latest survey period, particularly wages and fuel.
"The services sector slowed for the third consecutive month," said Qu Hongbin, an HSBC economist. "It reflected that the impact of policy tightening is taking effect."
But Qu said a continuing improvement in the labor market and a rapid growth in income will bolster the sector in the long term.
On the other hand, the HSBC China Manufacturing Purchasing Managers' Index, a related index measuring industrial activities, rose to 51.8 in March from February's 51.7.
Combined the two indices, China's economic growth remained on course, Qu said.
The People's Bank of China unveiled an interest rate hike late Tuesday, the second time this year, to curb inflation.
The HSBC Business Activity Index, a gauge of the services industry across the country, edged down to 51.7 in March from February's 51.9, the bank said yesterday.
The figure was much lower than the long-term average of 57.5, and was at a level indicative of only a modest rate of activity growth. A reading above 50 points to an expansion.
The survey found the cost of inputs rose to a four-month high in March. Respondents reported that prices of a wide range of inputs have risen during the latest survey period, particularly wages and fuel.
"The services sector slowed for the third consecutive month," said Qu Hongbin, an HSBC economist. "It reflected that the impact of policy tightening is taking effect."
But Qu said a continuing improvement in the labor market and a rapid growth in income will bolster the sector in the long term.
On the other hand, the HSBC China Manufacturing Purchasing Managers' Index, a related index measuring industrial activities, rose to 51.8 in March from February's 51.7.
Combined the two indices, China's economic growth remained on course, Qu said.
The People's Bank of China unveiled an interest rate hike late Tuesday, the second time this year, to curb inflation.
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