China’s service sector growth slows to seven-month low in September, despite increase in new orders
- Caixin/Markit service sector purchasing managers’ index (PMI) fell to 51.3 in September, down from 52.1 in August
- Sharp rise in input costs for labour and raw materials put pressure on companies, restraining business confidence, analyst says
Growth in China’s service sector slowed in September to its lowest pace in seven months due to the rising cost of labour and raw materials, a private survey showed on Tuesday, despite an uptick in new orders.
The Caixin/Markit services purchasing managers’ index (PMI), which surveys small, private sector firms on business activity, fell to 51.3 in September, the lowest reading since February, compared with 52.1 in August. The figure remained above 50, the point between expansion and contraction.
Services account for just over half China’s economy and include the provision of intangible goods such as hospitality, retail, healthcare and transportation.
“China’s economy showed signs of a marginal recovery in September, as the labour market improved and domestic demand increased at a faster pace,” said Zhengsheng Zhong, director of macroeconomic analysis at research firm CEBM Group.
“However, fluctuations in exchange rates, and rising costs of labour and raw materials increased pressure on companies, which restrained business confidence.”