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China's services PMI falls slightly in Nov: HSBC

Updated: 2013-12-05 09:32
( Xinhua)

BEIJING - China's service sector expanded steadily in November, with the HSBC China Services purchasing managers' index (PMI) edging down slightly to 52.5 in November from 52.6 in October, banking giant HSBC said Wednesday in a statement.

However, the sub-index breakdown is mixed. New business growth moderated to a four-month low of 52.6, compared with 53.5 in October, and business expectations fell to 60.9 from 61.5 in October, according to HSBC.

Employment recorded a third consecutive month of growth, rising to 51.1 in November from 51 in October, while the sub-index for backlogs of work was unchanged.

The input price sub-index was largely unchanged at 53.1, compared with 53.0 in October, marking a nine-month high, while the price-charged sub-index moderated for a third consecutive month to 50.7 in November compared with 51.3 in the previous month.

A PMI reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

Qu Hongbin, HSBC's chief China economist, said the service sector maintained a steady pace of growth in November, leading to a third consecutive month of employment expansion.

China's services PMI averaged a higher reading in the fourth quarter compared with the previous two quarters, suggesting a faster tertiary sector growth rate in the fourth quarter.

"Given that the tertiary sector now represents nearly 45 percent of (China's) GDP, this should add further support to China's 4Q GDP growth," he said.

However, the moderation of new business and output price growth implies that the underlying growth momentum has started to soften.

According to Qu, this is a reflection of the cool-down in the property market in recent weeks as local authorities ramp up property control measures and mortgage loans tighten.

With the services and manufacturing PMIs combined, Qu said he expects the Chinese economy to expand at around 7.6 percent year on year in the fourth quarter.

The overall gradual improvement in the labor market, better external outlook and the lift from reform measures are likely put China on a steady growth path going into the coming year, he added.

On Tuesday, the National Bureau of Statistics and the China Federation of Logistics and Purchasing released the official PMI for China's non-manufacturing sector, which stood at 56 percent in November.

The official non-manufacturing PMI covers both the service and construction sectors, while the HSBC PMI covers only the former.