China February service sector growth slows to four-month low: Caixin PMI

China February service sector growth slows to four-month low: Caixin PMI

International News

Activity in China’s services sector expanded at the slowest pace in four months in February, with new business still growing at a solid rate but increasing competition making it harder for companies to raise prices, a private survey showed. The findings echoed a similar softening in growth in China’s official services activity survey released on Wednesday, and contrasted with an unexpected pick-up in growth in its manufacturing sector as export orders rebounded. The February services PMI dipped to 52.6 in February on a seasonally adjusted basis, from 53.1 in January, the Markit/Caixin services purchasing managers’ index (PMI) showed. While it remained well above the 50-mark that separates expansion in activity from contraction on a monthly basis, it was the slowest rate of expansion since October. Any signs of flat-lining in services sector growth, which is more dependent on domestic demand, could indicate a slowdown in momentum for the economy overall. Some analysts say domestic demand growth already may have plateaued. That could put policymakers in a dilemma on how to meet ambitious growth targets while also containing financial risks created by years of debt-fueled stimulus. The central bank has gradually moved to a tightening bias in recent months, as a string of data showed the world’s second-largest economy was on steadier footing.