China services sector rebounds from 6-month low
September 3, 2014, 5:51 am

Photo taken on July 17, 2014 shows the commercial residential building under construction in Jinhua City, east China’s Zhejiang Province. The sale volume of the commercial housing in the province from January to July in 2014 is 213.1 billion yuan (34.5 billion US dollars), down by 27.1% compared with the same period of last year [Xinhua]

The purchasing managers’ index (PMI) of the non-manufacturing sector rebounded to 54.4 per cent last month, data compiled by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) said.

The reading stopped the losing streak since June and continued to stay above the 50-threshold that demarcates expansion and contraction.

China’s non-manufacturing PMI slipped to 54.2 per cent in July, marking a six-month low.

The official non-manufacturing PMI tracks business activity in sectors including construction, software, aviation, railways and real estate.

Business activity in the tertiary sector accelerated moderately, with its index rising 0.4 percentage point from July to stand at 53.6 per cent. Transport, postal services and public facility management were well above the 50-mark.

The sector’s new order index increased to 50.6 percent, slightly up from the previous month. Market demand for travel by air and train, software and telecommunications grew.

Cai Jin, deputy head of the CFLP, said close attention needs to be paid to the construction sector, as its new order index for August dropped to a record low, weighed down by weak investment.

In July, new home prices in 64 of 70 major Chinese cities tracked by the NBS dropped month on month, sending out new signs of cooling in the property market.

Wednesday’s data came after the release of manufacturing PMI, which stood at 51.1 per cent and showed signs of subdued momentum in the country’s economic recovery.

China’s economic growth returned to a stable and rising track, accelerating to 7.5 per cent in the second quarter after a disappointing start to the year.

Meanwhile, the services purchasing managers’ index (PMI) by HSBC jumped to 54.1 in August – the strongest in 17 months – from a nine-year low of 50.0 in July.

Source: Agencies