China’s services PMI rose to 52.3 in March: HSBC
China’s services PMI rose to 52.3 in March: HSBC

On Friday, a private survey showed expansion of China’s services sector in March despite growth decline in employment and new business, lowest in at least eight months.

The HSBC China Services Purchasing Managers' Index (PM1) edged up to 52.3 in March from 52.0 in February.

The HSBC China Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives at more than 400 private service-sector companies.
Any level above 50 reflects growth in the survey by HSBC and compiled by Markit.

The index, which showed a reading of 52 in February reached inched higher to 52.3 in March, indicating month-over-month expansion. In mid-2012, the readings comfortably hit the mid-fifties.

HSBC Holdings PLC said that new orders in the service sector grew at the slowest pace since July, while employment of the sector expanded only slightly. Overall, growth of Service sector activity remained modest and well below the long-term trend.

Qu Hongbin, HSBC's chief economist for China said that service providers took a more cautious approach to hire, raise their staff numbers only slightly over the month. Growth of China's services is happening at a faster pace than the country's manufacturing sector.

Annabel Fiddes, economist at Markit said, "Chinese manufacturers and service providers both managed only modest increases in output at the end of the first quarter. He added that relatively weak client demand dampened growth across both sectors.

However, the analysts said that service providers might face difficulties this year amid a property downturn and slower economic growth.

HSBC also released its composite PMI for March by combining the results for both manufacturing and services. This remained steady at 51.8, the same reading for February, which was itself a five month high.

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