Service activity sees modest gain
Print Edition
CHINA’S service activity in private firms grew modestly in March, while both new orders and job creation slowed, according to a survey yesterday.
The HSBC Services Business Activity Index, a gauge of operating conditions in private service companies, gained to 52.3 last month, from 52 in February, according to HSBC Holdings plc and research firm Markit.
The dividing mark of 50 separates expansion from contraction in activity.
However, Qu Hongbin, chief economist for China at HSBC, said the data suggested relatively weak customer demand, which had dampened growth across both services and industrial sectors.
“New orders expanded at the slowest pace in eight months at service providers while they fell at manufacturers,” Qu said.
“Also, service sector companies took a more cautious approach to hiring, raising their staff numbers only slightly over the month,” Qu added.
A set of earlier data showed the official non-manufacturing Purchasing Managers’ Index, a similar indicator compiled by the National Bureau of Statistics that weighs toward state-owned service companies, dipped to 53.7 in March from 53.9 a month earlier.
To counter the economic weakness, China relaxed property restrictions last week after the central bank cut interest rates on February 28. The cut was the second in three months, and followed a drop in the reserve requirement ratio in February.
The fall in the reserve ratio allowed more liquidity to flow into the economy to boost companies and industries. Data released by the government showed power generation picked up in March after a sharp drop in January and February.
China’s gross domestic product grew 7.4 percent from a year earlier in 2014, the slowest pace in 24 years, with growth in production slowing in all sectors except agriculture.
The government has lowered this year’s economic growth target to around 7 percent.
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