China Caixin service PMI hits three-month high
China's service sector growth accelerated in August, hitting a three-month high, a private survey showed Tuesday.
The Caixin General Services Purchasing Managers' Index rose to 52.7 in August from July's 51.5, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
A reading above 50 indicates expansion.
This came after an official survey showed China's non-manufacturing sector expanded at a slightly slower pace, as the index for the service sector stood at 53.4 in August, down from 54.5 in July.
The official survey samples 4,000 relatively large non-manufacturing companies, while the Caixin survey has a smaller sample size of over 400 companies and mainly focuses on small and medium-sized firms.
Caixin said that the increase in new orders received by Chinese services firms was the quickest in three months. A number of companies responding to the survey attributed the jump to improving market conditions and new marketing strategies.
The solid demand led services providers to speed up payroll expansion, with the rate of job creation accelerating to the fastest in four months.
Input costs rose marginally last month at services firms while output prices fell for the first time in 17 months amid reports of greater market competition.
The upturn, combined with the acceleration in the Caixin China General Manufacturing Purchasing Managers' Index to a six-month high of 51.6 in August, provides signs that growth in the economy has stabilized after a disappointing performance in July.
"The recovery in both manufacturing and services has led the economic outlook to continue to improve," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin Insight Group.
The service sector -- which includes finance, real estate services and marketing, transport and retail -- has become an increasingly important part of the Chinese economy as the country tries to shift its economy toward a growth model that draws strength from consumption, services, and innovation. The sector accounted for more than half of the Chinese economy last year.