Business / Macro

China service sector activity continues to retreat

(Xinhua) Updated: 2014-11-05 15:41

BEIJING - Growth in China's service sector slowed to its lowest level in three months in October, signalling the world's second-largest economy continues to face headwinds moving into the last quarter of 2014, a private survey reported on Wednesday.

The HSBC/Markit China Services Business Activity Index, which provides a snapshot of operating conditions in the sector, was posted at 52.9, down from 53.5 in September and 54.1 in August.

Service providers saw a solid rise in new business, but new order growth hit a five-month low for manufacturers, HSBC said in a report to clients.

It noted service sector employment rose modestly, while layoffs persist for manufacturers.

The HSBC/Markit Index samples over 400 private service sector companies in China. A reading above 50 indicates expansion, while one below 50 indicates contraction.

The data came after a decline in an official October services sector index released on Monday and a decelerating economic growth registered in the third quarter.

"Overall, the service sector grew steadily in October as the underlying business conditions continue to look better than in the manufacturing part of the economy," said Qu Hongbin, HSBC's chief China economist.

"While this pattern will likely continue, we still expect further easing measures in the coming months to help offset the downward pressures on the economy," Qu said.

The country's economy grew 7.3 percent in the third quarter, the lowest pace of increase since the global financial crisis, down from 7.5 percent in the second quarter.

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