A Chinese services index declined last month as the government’s campaign to curb inflation and asset prices dampened demand.
The purchasing managers’ index (PMI) fell to 52.5 from 54.1 in October, according to a statement issued by HSBC Holdings PLC and Markit Economics yesterday.
A reading above 50 indicates expansion. A separate non--manufacturing index from the China Federation of Logistics and Purchasing on Saturday showed a contraction.
Growth in the world’s second-largest economy is cooling as the worsening European debt crisis dampens Chinese exports just as lending curbs and a property crackdown slow domestic demand. China’s central bank last week cut lenders’ reserve requirements for the first time since 2008 to pump money into the financial system.
“Despite slower growth of service sector activities in November, employment growth picked up to a five-month high, which should support resilient consumer spending growth in the coming months,” Qu Hongbin (屈宏斌), a Hong Kong-based economist with HSBC, said in the statement. “Beijing can and should use policies that are targeted on small businesses and service sectors to keep GDP growth at above 8 percent for the coming year.”
The HSBC services index surveys purchasing managers in 400 privately owned companies in industries including retailing and property.
A non-manufacturing PMI released by the logistics federation fell to 49.7 last month from 57.7 the previous month.
Lu Ting (陸挺), a Hong Kong-based economist with Bank of America Corp, said the seasonal adjustments in HSBC’s services gauge were “compromised” by its small sample size. Both the HSBC and logistics federation indexes have much less “predictive power” than the equivalent gauges for manufacturing, he said.
China’s official manufacturing PMI released last week fell to 49 last month from 50.4 in October, the first contraction since February 2009.
Separately, India’s services industry expanded last month at the quickest pace in three months, stoking inflationary pressures in Asia’s third-largest economy.
The PMI rose to 53.2 from 49.1 in October, HSBC and Markit said in an e-mailed statement yesterday.
“Services sector activity picked up, but growth remains below -potential,” said Leif Eskesen, a Singapore-based economist at HSBC. “Unfortunately input costs and prices charged accelerated too, leaving the grim inflation story in place.”
He said the central bank may keep rates on hold “for a while” until there is a sustained decline in the inflation rate. The Reserve Bank is scheduled to announce its rate decision on Dec. 16.
GDP in India increased 6.9 percent in the three months through September from a year earlier, the weakest expansion since the second quarter of 2009, according to the nation’s statistics office.
Meanwhile, Russian services industry growth accelerated last month to the fastest pace in four months, showing the economy will end the year on an “optimistic note,” HSBC said.
The HSBC Russia Services PMI rose to 54.8 from 53.5 in October, the UK bank said in a report yesterday.
Combined with manufacturing, which expanded at the fastest pace since April, overall business growth hit an eight- month high, said Alexander Morozov, chief economist for Russia and CIS at HSBC, in the statement.
“The slowdown in Russian economic growth signaled by the PMIs in the third quarter seems to have been reversed in November,” Morozov said.
This indicates that GDP will return to its average growth rate for the past 12 months of about 0.35 percent per month, he said.
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