China’s services activities grew at lowest rate in seven months: Caixin PMI
The Caixin purchasing managers' index (PMI) for the services sector indicates that China's services growth dropped to its lowest point in September despite growing numbers of new business orders, while composite PMI monitoring business activities in both the services and manufacturing sectors witnessed a slight increase, according to the private survey released on Tuesday.
According to the survey, the Caixin services PMI fell to 51.3 in September, dropping to its lowest point in seven months and missing the market expectation of 52.1. The composite PMI, which read 51.9, stood 0.3 percentage points higher than in August, reaching its highest point since May. Readings above 50 imply expansion, and readings below fall into contraction territory.
New orders for the services sector in September rose at their fastest pace since January last year, but growth in business activities in the sector was still strained by rising costs alongside expected fluctuations in exchange rates, Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said in the Caixin report.
However, the increase in the composite PMI indicates that rising business activity in the manufacturing sector is offsetting some of the drag from the services sector, showing an overall rising economic performance, according to Caixin.
The services sector accounted for around 55 percent of China's GDP in the first six months of 2019, according to the National Bureau of Statistics (NBS). The sector is also the biggest contributor of jobs in the country, providing 359 million jobs in 2018 and accounting for 46.3 percent of total employment.
The Caixin PMI reading for services in September ran against the PMI released on September 30 by the NBS, which saw a slight increase of 0.5 percentage points from August to 53.