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Services sector slows in Feb but optimism is high
By Wang Yanlin |
March 3, 2011, Thursday
|
Online Edition
Online Edition
CHINA'S service industry reported further cooling in February, but business confidence improved to a six-month high based on rosy economic outlook, two surveys showed today.
After adjusting for seasonal variation, the HSBC Business Activity Index, which measures the services sector across the country, slid to 51.9 last month from January's 52.
The latest reading was much lower than the sector's long-run average of 57.5, at a level indicating a modest growth, the survey said. A reading above 50 indicates an expansion.
Meanwhile, the non-manufacturing business activity index compiled by the China Federation of Logistics and Purchasing stood at 44.1 percent in February, down 12.3 percentage points from the previous month and below the line of 50. The sharp fall was mainly due to seasonal changes, the federation said.
Qu Hongbin, an economist at HSBC, said slower growth of services may be helpful to curb inflation which has created tremendous pressure on producers. He also said people needed not to worry too much about the easing.
"The tight labor market and rising business expectations warrant a robust growth of service activities in the coming months," Qu said.
Despite a slowdown, services providers were more confident about the one-year business outlook in February. Their level of optimism was the highest in six months.
Expectations of further gains with new business and company expansion policies underpinned respondents' positive sentiment regarding the 12-month outlook, the survey said.
The HSBC China Manufacturing PMI, a gauge of manufacturing activities across the country, fell to a seven-month low of 51.7 in February from January's 54.5, reflecting synchronized moderations in both industrial sector and services sector.
China's gross domestic product grew 10.3 percent in 2010, making the country the world's second-largest economy.
After adjusting for seasonal variation, the HSBC Business Activity Index, which measures the services sector across the country, slid to 51.9 last month from January's 52.
The latest reading was much lower than the sector's long-run average of 57.5, at a level indicating a modest growth, the survey said. A reading above 50 indicates an expansion.
Meanwhile, the non-manufacturing business activity index compiled by the China Federation of Logistics and Purchasing stood at 44.1 percent in February, down 12.3 percentage points from the previous month and below the line of 50. The sharp fall was mainly due to seasonal changes, the federation said.
Qu Hongbin, an economist at HSBC, said slower growth of services may be helpful to curb inflation which has created tremendous pressure on producers. He also said people needed not to worry too much about the easing.
"The tight labor market and rising business expectations warrant a robust growth of service activities in the coming months," Qu said.
Despite a slowdown, services providers were more confident about the one-year business outlook in February. Their level of optimism was the highest in six months.
Expectations of further gains with new business and company expansion policies underpinned respondents' positive sentiment regarding the 12-month outlook, the survey said.
The HSBC China Manufacturing PMI, a gauge of manufacturing activities across the country, fell to a seven-month low of 51.7 in February from January's 54.5, reflecting synchronized moderations in both industrial sector and services sector.
China's gross domestic product grew 10.3 percent in 2010, making the country the world's second-largest economy.
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