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Service sector grows slowest in 6 years
By Wang Yanlin |
September 6, 2011, Tuesday
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Print Edition
Print Edition
CHINA'S service sector grew at the slowest pace in nearly six years in August as the economy moderated, according to a HSBC report yesterday.
The HSBC Business Activity Index, a seasonally adjusted gauge of the service sector in China, fell notably from July's 53.5 to a record low of 50.6 last month, signalling only a marginal expansion of activities in the service sector. The drop is the lowest since the bank started to keep records in November 2005.
A reading above 50 signals expansion, and a contraction below 50.
"Slowing new business inflows drove the HSBC China Services PMI reading to a record low," said Qu Hongbin, chief economist for China at HSBC, referring to the Purchasing Managers' Index.
"This (slowdown) reflects the effects of property and credit tightening measures," Qu said.
In contrast, the HSBC Purchasing Managers' Index, a composite indicator of operating conditions in the manufacturing sector, rebounded to 49.9 in August from July's 49.3.
The report said the service output increase was subdued last month due to further slower growth in new business and, in some cases, state-led policies aimed at cooling the property sector.
The report pointed out that the average cost burdens continued to rise markedly in August because of pressure from higher salaries.
Despite the weakness in activity and demand, the report showed that business confidence in the service sector rose.
"The degree of optimism rose to the highest in four months," the report said. "The confidence was backed by expectations of new product launches and success of commercial activities."
The HSBC Business Activity Index, a seasonally adjusted gauge of the service sector in China, fell notably from July's 53.5 to a record low of 50.6 last month, signalling only a marginal expansion of activities in the service sector. The drop is the lowest since the bank started to keep records in November 2005.
A reading above 50 signals expansion, and a contraction below 50.
"Slowing new business inflows drove the HSBC China Services PMI reading to a record low," said Qu Hongbin, chief economist for China at HSBC, referring to the Purchasing Managers' Index.
"This (slowdown) reflects the effects of property and credit tightening measures," Qu said.
In contrast, the HSBC Purchasing Managers' Index, a composite indicator of operating conditions in the manufacturing sector, rebounded to 49.9 in August from July's 49.3.
The report said the service output increase was subdued last month due to further slower growth in new business and, in some cases, state-led policies aimed at cooling the property sector.
The report pointed out that the average cost burdens continued to rise markedly in August because of pressure from higher salaries.
Despite the weakness in activity and demand, the report showed that business confidence in the service sector rose.
"The degree of optimism rose to the highest in four months," the report said. "The confidence was backed by expectations of new product launches and success of commercial activities."
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