BEIJING, April 5 (Reuters) – China’s services sector
expanded solidly in March and business confidence hit an
11-month high, though overall activity remained below its
long-term average, a private sector survey of purchasing
managers showed on Thursday.
The seasonally adjusted HSBC Services Purchasing Managers
Index (PMI) stood at 53.3 in March, down slightly from
February’s 53.9, but still signalling healthy growth with the
new business sub-index extending its unbroken period of
expansion to 40 months.
The upbeat survey echoes China’s official non-manufacturing
PMI, which delivered a reading of 58 for March when it was
published on Tuesday with a revised methodology that saw
February’s index revised up to 57.3 from a previous level of
48.4 under the old calculation.
A PMI reading below 50 indicates contracting activity while
a reading above 50 shows expansion.
The HSBC Services PMI, compiled by UK-based data provider
Markit, registered firmer client demand and anecdotal
improvement in overall business conditions with service
providers able to pass on higher input costs to customers via
increased output charges.
But while headline readings in the main index and various
component parts of the survey showed steady growth, the data
came laced with caveats about underperformance versus trend
growth rates and that jobs growth in the sector was the weakest
in the current period of expansion.
Qu Hongbin, HSBC’s Hong Kong-based chief economist for
China, said that overall economic growth appeared to be losing
some steam from his perspective — whether in export orders,
industrial production or employment.
“All these call for further easing measures, while
inflationary pressures should remain relatively contained in the
coming months,” Qu said in a statement accompanying the index.
(Reporting by Nick Edwards; Editing by Ken Wills)
