Caixin: China’s service sector expansion hits three-month low

BEIJING - The growth rate in China’s service sector fell to a three-month low in May, according to a survey released by Caixin on Friday, denting hopes that the nation’s slowing economy is gradually gathering steam. The Caixin Purchasing Managers’ Index for general services business activity finished May at 51.2, falling from April’s 51.8 and marking the weakest increase for China’s services sector since February.

Services company employment rose for the second month running in May, although the rate of job creation remained marginal overall, the survey revealed. Volumes of unfinished work at these companies rose for the second consecutive month, albeit marginally.

Released alongside the index was the Caixin Composite PMI data, which covers the nation’s manufacturing and service sectors. The Composite Output Index fell to 50.5 in May from 50.8 in April. The index is based on the Caixin Purchasing Managers’ Index for manufacturing released June 1st, and the latest services sector index.

The composite PMI for May underscored “worsening conditions in both the manufacturing and services sectors,” said Zhong Zhengsheng, director of Macroeconomic Analysis at CEBM Group, a subsidiary of Caixin Insight Group.

“Underlying structural changes are still going on, with the manufacturing sector shrinking and services expanding…The government needs to continue to push forward stabilization measures to help the economy recover.”   www.webershandwick.cn (ATI).