China’s services sector PMI at 11-month high

China has unveiled targeted support measures to help the most vulnerable sectors [Xinhua]

Business activity in China’s service sector rose to an 11-month high in July, a private survey showed on Wednesday.

The services Purchasing Managers’ Index (PMI) compiled by Caixin/Markit rose to 53.8 from June’s 51.8 owing to rising business volumes and solid new order growth.

A reading above 50 indicates expansion.

It has held above 50, the dividing line between expansion and contraction, for the last twelve months.

Anecdotal evidence suggested that stronger underlying client demand and new customer wins led to increased new work at service providers, according to the Caixin report.

A sub-index measuring new business jumped to 54.0 from June’s 52.2.

The services sector accounts for almost half of the economy and is the biggest employer in China.

The Caixin China Composite PMI data, which covers both manufacturing and services, signalled a further increase in activity during July, but the Composite Output Index posted only fractionally above the neutral 50.0 mark at 50.2, the weakest rate of expansion in 14 months.

The report attributed the slower output rate to the manufacturing sector, which registered the quickest reduction of output since November 2011.

The Caixin data on Monday showed China’s manufacturing activity retreated to a two-year low in July due to less output and fewer new orders.

 

 TBP and Agencies