China services sector grows at fastest pace in four months in May
Surge in new orders helps sector offset a slowdown in manufacturing, Caixin PMI survey shows
Activity in China’s services sector expanded at the fastest pace in fourth months in May thanks to a surge in new orders, a private business survey showed, helping to offset worries about unexpected weakness in manufacturing.
The Caixin/Markit services purchasing managers’ index (PMI) rose to 52.8 in May from April’s 51.5, breaking a four-month decline and marking the highest reading since January. There was no breakdown by business segment in the survey.
The findings are in sync with an official survey last week which also pointed to accelerated growth and stronger demand in services. The sector accounts for more than half of China’s gross domestic product.
The new orders sub-index rose to 53.5 in May from April’s 53.0, signalling the strongest customer demand since December.
The 12-month business outlook among the mostly small and medium-sized services providers in the survey also rose from a five-month low in April.
That bodes well for a government that is counting on services, particularly high value-added services in finance and technology, to lessen the economy’s traditional reliance on heavy industry and investment.
A similar Caixin survey last week showed the manufacturing sector unexpectedly contracted in May as demand ebbed and shrinking factory prices dented profits.