China’s services industries expanded at the fastest pace since August last year as gains in retailing and construction aid a recovery in the world’s second-biggest economy.
The non-manufacturing Purchasing Managers’ Index rose to 56.2 last month from 56.1 in December last year, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.
The federation’s manufacturing PMI released on Friday showed a fourth month of expansion although the reading declined to 50.4 from 50.6 in December last year.
A separate gauge from HSBC Holdings PLC and Markit Economics published the same day rose to the highest level in two years.
HSBC and Markit will release their services survey tomorrow. The index fell to 51.7 in December, the third straight decline.
The logistics federation said yesterday that the retailing industry saw an “obvious” improvement while new orders in civil engineering and infrastructure construction rose to the highest since March last year, according to the statement.
In contrast, gauges of activity and new orders for commercial real estate dropped below the 50 level that divides expansion from contraction, indicating the property market is “entering the low season,” the statement said.
The restaurant industry suffered from an austerity drive by Chinese Vice President Xi Jinping (習近平) that includes a ban on lavish banquets by government departments and bureaucrats.
The sector’s business activity index fell by 17.3 points from the reading in January last year and the new orders gauge fell 6.5 points to below 50, the statement said.
An index of intermediate input prices rose 4.4 points to a 10-month high of 58.2, a rebound that is “a cause for concern,” Cai Jin (蔡瑾), a vice president at the logistics federation said in the statement.
China’s economic growth accelerated for the first time in eight quarters in the last three months of last year, rising 7.9 percent from a year earlier. The pace may pick up to 8.1 percent in the first quarter, according to the median estimate in a Bloomberg News survey last month.
“The economy should be on a gradually improving path,” said Huang Yiping (黃益平), chief Asia economist with Barclays PLC in Hong Kong. There is a risk that “inflation will pick up faster than the consensus is expecting.”
Inflation accelerated to 2.5 percent in December last year, the fastest pace in seven months, while a measure of input prices in the federation’s manufacturing PMI rose to a 17-month high.
Services industries accounted for 45 percent of GDP last year, Chinese Bureau of Statistics Commissioner Ma Jiantang (馬建堂) said on Jan. 18, up from 41 percent in 2003. The government is seeking to increase the share to 47 percent by 2015.