Surveys show activities softening
Print Edition
CHINA’S service activity grew at a slower pace in state-owned enterprises but rose to a four-month high in private firms, two separate surveys showed yesterday.
Both survey results, however, pointed to soft activities in general, analysts said, which supported the government’s decision to provide incentives to boost the economy.
The official non-manufacturing Purchasing Managers’ Index, a gauge of vitality in SOEs in the service sector, fell 0.5 points from a month earlier to 54.5 in March, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said.
A reading above 50 means expansion, and the March reading pointed to a weakening trend after a rebound in February.
The component indices showed that new orders shed 0.6 points to 50.8 in March, and prices contracted when they fell to 49.5 although they were up 0.5 points from February.
Li Maoyu, an analyst at Changjiang Securities Co, said the lower reading proved that China’s economy was weakening after earlier disappointing data.
“It is high time for China to roll out certain accommodative policies to prevent a structural economic slowdown,” Li said.
In contrast, the HSBC China Services Business Activity Index, which is slated toward private service companies, rose to 51.9 last month from 51 in February, said HSBC Holdings Plc and consulting firm Markit.
Qu Hongbin, chief economist for China at HSBC, said the reading suggested a modest improvement in business activities in March, with employment growing at the quickest pace since June.
“However, growth remained subdued in the context of historical data,” Qu said. “Combined with the manufacturing PMI reading, the underlying strength of the economy is softening.”
Several data, including industrial production, retail sales and fixed-asset investment, suggested the growth in the first quarter may not be strong enough to carry the economy to meet the annual target of 7.5 percent.
On Wednesday, China unveiled new measures, including cutting taxes for small firms, to boost its economy.
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