China Service Sector Expands Most In 6 Months
February 02 2016 - 8:23PM
RTTF2
China's service providers experienced the fastest growth in six
months in January but overall private sector activity was stable
due to the ongoing contraction in manufacturing.
The Caixin General Services Purchasing Managers' Index rose to
52.4, the highest level since July, from December's 17-month low of
50.2, survey results from Markit showed Wednesday.
The Composite Output Index came in at 50.1 in January, slightly
above the neutral 50-point level and up from 49.4 in December.
Improved inflows of new business underpinned the latest
expansion of services activity. Meanwhile, the downturn in the
manufacturing sector extended into 2016, with production declining
for the second consecutive month.
Data showed that new orders increased at service sector firms
but declined again at manufacturers. Consequently, composite
business rose slightly after a two-month sequence of reduction.
Divergent employment trends were observed, with staff numbers
rising at services companies but falling at manufacturing firms in
January.
Both services providers and manufacturers reduced the prices
they charged in January. The rate of discounting was marginal
across the service sector, while goods producers cut their prices
at a moderate pace.
Service providers were generally optimistic towards the one-year
business outlook in January.
The government should continue to deepen reform, relax
administrative controls and reduce restrictions on market entry for
service providers," He Fan, chief economist at Caixin Insight
Group, said. "This will release the potential of the services
sector and help improve the economic structure."
Chinese authorities yesterday lowered the minimum mortgage down
payment requirement for first-time as well as second-time home
buyers, in yet another effort to boost the property market and
slowing economy.
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