China's services sector saw accelerating growth in August

BEIJING - The growth of China's service sector accelerated in August as the Caixin General Services Purchasing Managers' Index (PMI) rose to 52.1 from 51.7 in July. For service providers, new orders continued to increase in August compared with July, but the growth rate fell to a three-month low.

Employment in the services sector stabilised, after a marginal reduction in staff numbers in July. Some companies said they hired additional employees to help with new projects, while others indicated that they had shed workers.

Service providers saw their costs increase in August by the slowest pace since January 2015, with some attributing the ease in pressure to cheaper items such as diesel fuel. The prices they charged customers also increased in August, but the rate of growth was the lowest in five months.

"Overall, the economy continued to expand in August at a pace similar to the growth rate for July," said Zhong Zhengsheng, director of macroeconomic analysis at the CEBM Group, a subsidiary of Caixin Insight Group.

But conditions in manufacturing and service sectors diverged again, he said, referring to the comparison of services PMI going up while manufacturing PMI went down in August. "Downward pressure on China's economy remains, and supportive policies must continue," Zhong said. www.webershandwick.cn (ATI).