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Service sector growth slows again in October
By Wang Yanlin |
November 5, 2012, Monday
|
Online Edition
Online Edition
China's non-manufacturing activity in private and export-oriented companies declined again in October, indicating the recovery of the world's second-largest economy is still shaky.
The Business Activity Index, a gauge of operating conditions in the service industry slanted toward private and export-oriented companies, was 53.5 last month, down from 54.3 in September, an HSBC survey showed today.
A reading above 50 means expansion.
The index signaled a slower pace of expansion in the service sector, the survey report said, noting the outstanding business fell at the quickest pace in two years despite an increased number of clients and orders.
"Despite a moderating growth in service activity, the Chinese economy is gradually bottoming out as the filtering-through of earlier easing policies is boosting domestic demand," said Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC.
"We expect the continuation of policy easing to sustain the recovery in the manufacturing sector in the coming months, which should lend additional support to growth in the service sector and consumer spending," Qu added.
According to the survey, Chinese service sector firms were optimistic regarding the one-year business outlook in October. A number of firms attributed their optimism to expansionary policies.
China has relaxed control in approving big investment projects and unveiled new rules to stimulate consumption since May in a bid to cushion a slowing economy amid weak demand at both home and abroad.
The country's gross domestic product grew 7.4 percent from a year earlier in the July-September period, the slowest in 14 quarters. But economists widely acknowledged it as a sign that China's economy has climbed out of its worst slump since the global financial crisis with September data beating market expectations.
The Business Activity Index, a gauge of operating conditions in the service industry slanted toward private and export-oriented companies, was 53.5 last month, down from 54.3 in September, an HSBC survey showed today.
A reading above 50 means expansion.
The index signaled a slower pace of expansion in the service sector, the survey report said, noting the outstanding business fell at the quickest pace in two years despite an increased number of clients and orders.
"Despite a moderating growth in service activity, the Chinese economy is gradually bottoming out as the filtering-through of earlier easing policies is boosting domestic demand," said Qu Hongbin, chief economist for China and co-head of Asian Economic Research at HSBC.
"We expect the continuation of policy easing to sustain the recovery in the manufacturing sector in the coming months, which should lend additional support to growth in the service sector and consumer spending," Qu added.
According to the survey, Chinese service sector firms were optimistic regarding the one-year business outlook in October. A number of firms attributed their optimism to expansionary policies.
China has relaxed control in approving big investment projects and unveiled new rules to stimulate consumption since May in a bid to cushion a slowing economy amid weak demand at both home and abroad.
The country's gross domestic product grew 7.4 percent from a year earlier in the July-September period, the slowest in 14 quarters. But economists widely acknowledged it as a sign that China's economy has climbed out of its worst slump since the global financial crisis with September data beating market expectations.
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