China’s services sector rebounded last month after its growth hit a one-year low in August, according to a private sector survey yesterday that follows last week’s much more gloomy official assessment.
The HSBC services sector Purchasing Managers’ Index (PMI) rose to 54.3 points last month from 52.0 in August, rebounding to its highest level since May thanks to an uptick in the new business sub-index to 54.0 — also the highest level in four months.
The sunny results are in marked contrast to an official non-manufacturing PMI released on Wednesday, which showed activity last month slowing to the weakest level since November 2010.
SURVEY
The official survey, published by the National Bureau of Statistics, tends to reflect larger state-owned firms, and the two do not necessarily move in tandem.
Yesterday’s survey also contrasts with both the HSBC and the official PMI ones of China’s vast manufacturing sector, which indicate that China is headed for a seventh straight quarter of slowing growth.
GRADUAL IMPROVEMENT
“This is likely an indication of a gradual improvement of domestic economic conditions due to the earlier easing measures and the stronger consumption demand in the run-up to the Golden Week holiday,” said Qu Hongbin (屈宏斌), HSBC’s chief economist for China.
“While this helped to cushion the ongoing slowdown of manufacturing sectors, a meaningful turnaround in domestic demand requires additional easing efforts,” he said.
NATIONAL DAY
The week-long National Day holiday at the beginning of this month saw hundreds of millions of Chinese hit the roads and shopping malls, straining capacity at tourist destinations and crowding trains and airports. This year, the holiday coincided with the Mid-Autumn Festival, when families and business contacts treat each other to restaurant meals, mooncakes and gifts.
INDEX RISE
HSBC’s “prices charged” sub-index rose above 50 — the line that separates expansion from contraction — for the first time since March. The rise could reflect the holiday as well as reflecting an increase in inflation after a summer trough.
However, consumers may turn more cautious as the slowdown in the manufacturing sector feeds through to the urban services sector, as implied by the official non-manufacturing PMI results for last month, Standard Chartered said in a report.
The HSBC services PMI did reflect a slight reduction in the sub-index that tracks employment, although Markit Economics, which compiles the index, noted that employment grew at its second fastest pace in the past 10 months, thanks to the rise in new orders.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by