China's services industries grow in August at fastest in three months
China's services industries expanded in August at the fastest pace in three months, signaling stable economic growth, a private report showed today.
The Caixin China General Services Purchasing Managers' Index, a gauge of operating conditions in service companies, rebounded to 52.7 in August from July's 14-month low of 51.5, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.
The increase in new activity was the fastest seen in three months, with a number of companies linking growth to improving market conditions and new marketing strategies, the survey said.
Stronger growth of activity and new orders led service providers to expand their payrolls again in August as the rate of job creation was the fastest seen for four months.
“The index of new business signalled a solid increase in workload. Input costs increased only marginally while prices charged surprisingly fell to contraction territory,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. “The recovery in both manufacturing and services has led the economic outlook to continue to improve. But we need to closely watch whether the recent rises in input costs will weigh on corporate profits and fuel inflation.”
The Caixin manufacturing PMI, which was released last Friday, rose to a six-month high of 51.6 from 51.1 in July.
China's official manufacturing PMI, leaning toward larger and state-owned companies, rebounded to 51.7 in August from July’s 51.4, said the National Bureau of Statistics.
Economists said strong production and a rebound in new orders lifted the August PMI, with better-than expected economic growth likely to be recorded in the third quarter.
The Australia and New Zealand Banking Group said third quarter GDP growth may exceed its previous forecast of 6.5 percent, but it kept its full-year forecast at 6.7 percent.
The official data also showed China's non-manufacturing sector expanding at the slowest since May last year, with the non-manufacturing PMI falling to 53.4 from July's 54.5.
The official non-manufacturing PMI survey covers around 4,000 service providers, while the Caixin services PMI covers 400, resulting in divergence of data.
