China’s services sector growth slows down in July: Survey
The Dollar Business Bureau
The growth of China’s services sector was marginally low in the month of July as the expansion of new businesses eased, said a private business survey on Thursday.
The latest findings were in sync with an official estimate of non-manufacturing sector released on Monday that showed cooling down of growth in services sector, adding to the speculations that the world’s second largest economy could grow slightly slower in upcoming months.
The Caixin/Markit services purchasing managers' index (PMI) declined a little to 51.5 in July compared to 51.6 in the previous month.
Though the decline was marginal, the figures matched with the level of reading in April this year that was lowest since May last year.
New businesses continued to grow at a decent pace but at a little slower. The growth rate of new work cooled down to a low of 16 months.
The employment rate in the services sector improved a little as companies continued to hire workers, however at a slow pace.
China is banking on services sector, particularly high value-added services such as finance and technology, in order to reduce the traditional dependence of the economy on investment and heavy industries.
China’s services sector, contributed a little over a half to the country’s economy in first half of 2017, increased 7.7% during the period, outpacing the total GDP growth of 6.9%.
However, the growth in financial and real estate sectors slowed to several years low in the second quarter of the year as property dealings in several cities of the country dropped due to regulatory measures to tamp down volatility and restricting the risky activities in the finance sector.
“China’s economic performance in July was stronger than expected, mainly due to sustained recovery in the manufacturing sector", said Zhengsheng Zhong, Director, Macroeconomic Analysis, CEBM Group, said in a statement.
However, Zhong said that the downward pressure on the China’s economy expected to continue as the confidence for index gauging companies towards the one-year business outlook declined in manufacturing as well as services industries.