Services rise fastest in 4 months on new orders
Print Edition
CHINA’S services industries grew by the fastest pace in four months in May amid the boost given by new orders, a private report said yesterday.
The Caixin General Services Purchasing Managers’ Index rose to 52.8 in May from April’s 51.5, according to a survey conducted by financial information service provider Markit and sponsored by Caixin Media Co. Ltd.
It was the highest reading since January’s 53.1 points.
A reading above 50 indicates expansion.
The rise in new orders was the most marked this year amid stronger underlying customer demand, the report said.
Employment continued to increase, while the rate of job creation eased to the weakest in nine months.
Meanwhile, services companies reported intense cost pressures in May due to higher raw material prices and staff costs.
The increase in the Caixin services PMI is in line with the growth in official PMI released by the National Bureau of Statistics last week.
The official manufacturing PMI stood at 51.2 points, flat from April.
But the Caixin manufacturing PMI, released last week, showed the first contraction in the sector since June last year as it fell to 49.6 from April’s 50.3.
Economists said the growth in the services sector helped support the economy as manufacturing activities cooled.
“The improvement in the services sector bolstered the Chinese economy in May,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.
“However, the rapid deterioration in the manufacturing industry is worrying. We need to closely monitor whether the diverging trends in manufacturing and services will widen further.”
The services industries, including finance, construction, transport, and retail, accounted for 51.6 percent of China’s gross domestic product last year, up 1.4 percentage points from 2015 and 11.8 percentage points higher than the industrial sector.
Economists expect China’s economic growth to ease in the second quarter from an 18-month high of 6.9 percent in the first quarter.
The World Bank yesterday maintained its forecast for China’s GDP growth at 6.5 percent this year, in line with the government’s target.
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