China's service sectors expanded at the slowest pace in six months, reigniting worries that the economic growth may be ebbing, a private report showed yesterday.
The Caixin China General Services Purchasing Managers' Index, a gauge of operating conditions in mostly private service companies, dipped for the third straight month to 52.2 last month from February's 52.6, according to the survey conducted by financial information service provider Markit and sponsored by Cai-xin Media.
Business activity and new orders both expanded at the weakest pace in six months, while employment growth was the slowest this year so far.
Service companies, however, suffered the fastest rise in their costs since February 2013 and this forced them to hike their prices charged at the end of the first quarter, the survey showed.
“The Chinese economy continued to expand in March, but growth in both manufacturing and services slowed,” said Zhong Zhengsheng, director of macro-economic analysis at CEBM Group. “Weaker increases in new business have clouded the economic outlook, and investors should watch closely for signs of a turning point in the second quarter.”
The Caixin China General Manufacturing PMI, released on Saturday, fell to 51.2 in March from 51.7 in February.
Caixin attributed the weaker expansion to new export orders that increased at the slowest rate in three months.
However, China's official manufacturing PMI, slated toward larger and state-owned companies, rose to 51.8 in March from 51.6 in February, the National Bureau of Statistics said on March 31.
The official non-manufacturing PMI in March grew to 55.1 — the highest in nearly three years — from February's 54.2.
Economists have forecast China's economy to grow 6.8 percent year on year in the first quarter, up 0.1 percentage points over last year's annual growth and the same as the annual expansion in the fourth quarter of last year.