Service activity rebounds in August
Print Edition
CHINA’S service activity rebounded in August as shown by two separate surveys yesterday, but analysts cautioned the data may not change the fact that the economy is faltering.
The official non-manufacturing Purchasing Managers’ Index, a gauge of operating conditions in the service sector compiled by the China Federation of Logistics and Purchasing, rose 0.2 points from a month earlier to 54.4 in August.
Meanwhile, the HSBC China Services Business Activity Index, which weighs toward private service companies, rose to 54.1 last month, a 17-month high and up from July’s 50, according to HSBC Holdings Plc and research firm Markit.
A reading above 50 indicates expansion.
Qu Hongbin, chief economist for China at HSBC, said that although the headline data improved, component indices suggested a mixed picture of the economy rather than a broad-based rebound.
“The economy still faces downside risks to growth in the second half of the year from the property sector slowdown,” Qu said. “We think policy-makers should ease measures further to help support the recovery.”
Components of the official non-manufacturing PMI showed that production slowed 0.7 points from July to 50 in August, while prices lost 1.2 points to 52.2. Employment gained from 49.3 to 49.6.
Services, which account for 46 percent of China’s gross domestic product and roughly half of all jobs, have been a brighter spot in the economy this year compared with manufacturing. But it remains a question whether services are able to save the overall economy, analysts said.
Earlier data showed that China’s manufacturing sector grew at a slower pace for the first time since February in August. The official PMI, which measures operating conditions in industrial firms, fell to 51.1 in August from 51.7 in July.
The weak data sparked worries China may not meet this year’s economic growth target of 7.5 percent.
“The authorities will likely ... launch more supportive policies,” said Zhou Hao, economist at Australia & New Zealand Banking Group Ltd.
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