Quicker expansion by private service firms boosts index
By Wang Yanlin |
October 9, 2012, Tuesday
|
Print Edition
Print Edition
BUSINESS activity and new orders for China's private service companies rose in September, with an industry index posting a surge in growth at the fastest pace since May, an HSBC report showed yesterday.
The Business Activity Index, a gauge of operating conditions in mainly private and export-oriented service companies, hit 54.3 last month, up from 52 in August, the bank said in a report.
The latest rise in the index reflected quicker expansion in service sector activity, the report said, noting that some survey respondents attributed the growth to improved economic conditions. A reading above 50 means expansion.
"The service sector growth picked up last month thanks to rising new business flows," said Qu Hongbin, chief economist for China at HSBC. "This likely indicates a gradual improvement in domestic economic conditions due to earlier easing measures and stronger consumption demand in the run-up to the National Day holiday."
However, state-owned service companies seemed to perform less well. The official Non-manufacturing Purchasing Managers' Index, which is slanted toward big state-owned firms, lost 2.6 points from a month earlier to 53.7 last month, the National Bureau of Statistics said last week.
Zhou Hao, an economist at the Australia & New Zealand Banking Group Ltd, said the indices reflected insufficient demand domestically and overseas and the government needed to take more action.
He expected the central bank to cut reserve requirement ratio this month, possibly after economic data for September are released next week.
"China needs more stimulus to restore people's confidence in the economy," Zhou said.
The Business Activity Index, a gauge of operating conditions in mainly private and export-oriented service companies, hit 54.3 last month, up from 52 in August, the bank said in a report.
The latest rise in the index reflected quicker expansion in service sector activity, the report said, noting that some survey respondents attributed the growth to improved economic conditions. A reading above 50 means expansion.
"The service sector growth picked up last month thanks to rising new business flows," said Qu Hongbin, chief economist for China at HSBC. "This likely indicates a gradual improvement in domestic economic conditions due to earlier easing measures and stronger consumption demand in the run-up to the National Day holiday."
However, state-owned service companies seemed to perform less well. The official Non-manufacturing Purchasing Managers' Index, which is slanted toward big state-owned firms, lost 2.6 points from a month earlier to 53.7 last month, the National Bureau of Statistics said last week.
Zhou Hao, an economist at the Australia & New Zealand Banking Group Ltd, said the indices reflected insufficient demand domestically and overseas and the government needed to take more action.
He expected the central bank to cut reserve requirement ratio this month, possibly after economic data for September are released next week.
"China needs more stimulus to restore people's confidence in the economy," Zhou said.
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