China's Services Growth Slips To 5-month Low In November, Private PMI Shows
Samantha LuanChina's services activity expanded at its slowest pace in five months in November, as growth in new orders softened despite a boost from foreign demand, according to a private survey released on Wednesday.
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China's services activity expanded at its slowest pace in five months in November, as growth in new orders softened despite a boost from foreign demand, according to a private survey released on Wednesday.
The RatingDog China General Services PMI, compiled by S&P Global, slipped to 52.1 from 52.6 in October, marking the weakest expansion since June. The 50-mark separates growth from contraction.
The survey broadly aligns with the government's official services PMI released on Sunday, which fell to 49.5 from 50.2 in October.
The RatingDog index is viewed as a better gauge of smaller, export-oriented service providers along China's east coast, while the official PMI primarily tracks large and medium-sized enterprises, including state-owned companies.
Momentum in the world's second-largest economy has faltered this year, with third quarter GDP growth slowing to its weakest pace in a year.
The survey showed the new orders index rose at the slowest pace in five months, while new export business returned to expansion after contracting in October, a shift attributed to reduced uncertainty surrounding U.S.-China trade tensions.
"While a recovery in external demand provided marginal support this month (November), the contraction in employment, pressure on profit margins, and weakening expectations remain the main constraints facing the sector," said Yao Yu, Founder at RatingDog.
Employment in the services sector declined for a fourth consecutive month in November, leading to an increase in unfinished work after a reduction the previous month.
Average input costs continued to rise, albeit at a slower pace, driven by expenses for raw materials, office supplies, and fuel. To mitigate these cost pressures, some firms partially passed on the increases to consumers, resulting in a slight rise in output charges.
Business confidence in the sector expanded yet again last month but at its slowest pace since April.
The Composite Output Index, which combines manufacturing and services performance, came in at 51.2 in November, down from 51.8 in October.
