Positive signs in the service sector
By Wang Yanlin |
May 5, 2012, Saturday
|
Print Edition
Print Edition
CHINA'S non-manufacturing activities in private and export-oriented companies strengthened last month, contrasting weaker growth at large state-owned service enterprises, an HSBC survey showed yesterday.
The headline seasonally adjusted Business Activity Index, produced by HSBC and Markit Economics, reached a six-month high of 54.1 in April, up from 53.3 in March. It was due to solid growth of new business amid improving business conditions, the bank said.
In comparison, the official Purchasing Managers' Index for the service sector was at 56.1 last month, down from 58 in March, the National Bureau of Statistics said on Thursday.
A reading above 50 means expansion in both surveys. Compared with the official index, which is slanted toward state-owned enterprises, the HSBC survey emphasizes private and export-oriented companies.
"Growth momentum in the service sector started to pick up," said Qu Hongbin, chief economist for China at HSBC. "This, plus the modest improvement within the manufacturing sector, confirms our view that the Chinese economy is likely to bottom out in the second quarter."
Qu still urged further monetary easing to boost growth as inflation pressures remain contained.
Li Maoyu, an analyst at Changjiang Securities Co, said the performance of state-owned enterprises is highly likely to improve this month.
"Private companies are usually more acute to changing business conditions. State-owned enterprises may follow their lead," Li said.
China's gross domestic product expanded 8.1 percent from a year earlier in the first quarter, the slowest in nearly three years. Analysts expected growth to rebound to around 8.4 percent in the second quarter.
China has been working to restructure its economy from an excessive reliance on exports and investment.
The headline seasonally adjusted Business Activity Index, produced by HSBC and Markit Economics, reached a six-month high of 54.1 in April, up from 53.3 in March. It was due to solid growth of new business amid improving business conditions, the bank said.
In comparison, the official Purchasing Managers' Index for the service sector was at 56.1 last month, down from 58 in March, the National Bureau of Statistics said on Thursday.
A reading above 50 means expansion in both surveys. Compared with the official index, which is slanted toward state-owned enterprises, the HSBC survey emphasizes private and export-oriented companies.
"Growth momentum in the service sector started to pick up," said Qu Hongbin, chief economist for China at HSBC. "This, plus the modest improvement within the manufacturing sector, confirms our view that the Chinese economy is likely to bottom out in the second quarter."
Qu still urged further monetary easing to boost growth as inflation pressures remain contained.
Li Maoyu, an analyst at Changjiang Securities Co, said the performance of state-owned enterprises is highly likely to improve this month.
"Private companies are usually more acute to changing business conditions. State-owned enterprises may follow their lead," Li said.
China's gross domestic product expanded 8.1 percent from a year earlier in the first quarter, the slowest in nearly three years. Analysts expected growth to rebound to around 8.4 percent in the second quarter.
China has been working to restructure its economy from an excessive reliance on exports and investment.
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