ACTIVITY in China’s services sector expanded at the fastest pace in 13 months in October, offering further indications that the economy has stabilised, though activity in some important areas including new orders slowed.
The official purchasing managers’ index (PMI) for the non-manufacturing sector rose to 56.3 in October from September’s 55.4, the National Bureau of Statistics (NBS) said yesterday.
“The non-manufacturing sector should continue to develop at a stable rate over the next few months, though there still needs to be more market training and promotion to further release the service sector's potential,” said Cai Jin, vice-president of the China Federation of Logistics and Purchasing, which helped compile the data.
The services industry is an increasingly important pillar in China’s economy as the government tries to move away from investment and exports as the main drivers of expansion.
The sector contributed to 45 per cent of China's gross domestic output in 2012, and it overtook manufacturing as the biggest employer in 2011. It has weathered the global slowdown much better than the factory sector.
However, the PMI showed some areas of slowing activity, pointing to unevenness in the recovery.
The sub-index measuring new orders fell to 51.6 from a high of 53.4 the previous month, while the commercial services, the food and drinks industry and real estate sub-indices were below the 50 point line separating expansion from contraction. Measures to boost the service sector and to open it up to foreign competition are expected to be unveiled at a meeting of top communist party officials to be held from 9-12 November. e meeting will lay out the leadership’s economic reform agenda.
Yesterday’s release of the services sector index followed the bureau’s manufacturing PMI on Friday, which showed factory activity expanded at its fastest rate in 18 months in October, with strong output the main driver of the expansion.