Private service activity dampens
Print Edition
CHINA’S service activity in private firms grew at the slowest pace in 17 months in December, which suggested that new growth stimulus might not be enough to offset an economic downturn trend.
The Caixin/Markit Purchasing Managers’ Index fell to 50.2 in December from 51.2 a month ago, the lowest pace since July 2014, according to a statement yesterday.
A reading above 50 points signals growth while one below points to a contraction.
“The government needs to gradually relax restrictions in the service sector to release the potential of supply-side reform, improve the economic structure and help the industrial transformation and upgrading,” He Fan, Beijing-based chief economist at Caixin’s think tank division Caixin Insight Group, said in a statement.
The new business sub-index fell from November as firms saw subdued demand while the employment sub-index picked up as companies planned expansion. Business prospects were flat.
Amid the slower growth in the service sector, the Caixin China Composite Output Index, which covers services and manufacturing, fell below the neutral 50-point level to 49.4 in December, from 50.5 in November. The drop suggested China’s economic recovery might still face turbulence and uncertainties.
The official services PMI, which focuses more on state-owned large companies, rose to 54.4 in December from November’s 53.6.
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