Service sector sees seasonal softening
But business activity still expands in Nov
The expansion of China’s non- manufacturing business activity eased slightly in November because of a seasonal decline in new orders, the National Bureau of Statistics and the China Federation of Logistics and Purchasing said on Tuesday. The non- manufacturing Purchasing Managers’ Index fell to 56 from 56.3 in October, indicating stable expansion of the service and construction sectors. New orders moderated in November, especially for the service sector, as indicated by the PMI sub-index of 51, lower than 51.6 in October.
Activity in several industries including air and road transport, catering services and environmental protection, contracted last month, with below-50 PMI readings.
Meanwhile, activity and new orders in the real estate market achieved a marked rebound, according to the official data.
Cai Jin, vice-chairman of the CFLP, said that employment and business expectations in the non- manufacturing sector continue to rise, demonstrating that both the pace and quality of economic growth are improving.
“With the sub- index of business’ selling prices dropping below 50, inflationary pressure has been further relieved,” he said.
In November, the subindex covering entrepreneurs’ expectations rose to 61.3 from 60.5, the second monthly increase in a row.
“Signs of a comprehensive deepening of reform raised by the Third Plenum of the Communist Party of China’s 18th Central Committee boosted enterprises’ confidence,” said Cai.
On Sunday, the NBS and the CFLP released the manufacturing PMI for November, which came in at 51.4, unchanged from October. The November and October PMI readings were the highest since April 2012, suggesting that economic activity remained solid.
Zhu Haibin, chief economist at JPMorgan Chase & Co, said that the PMI readings for November and October suggest that economic activity remained solid through the current quarter.
“As the NBS PMI statement mentioned, demand conditions across investment, consumption and exports all point to a stable near-term growth picture,” he said.
The government’s reform measures will benefit longterm growth, though some will drag on economic growth in the near term, Zhu added.
Looking at the recent economic data, Nomura Holdings Inc’s chief economist in China, Zhiwei Zhang, said: “We maintain our view that GDP growth will slow to 7.5 percent in the fourth quarter from the peak of 7.8 percent in the third, and it will continue to slow to 6.9 percent next year, amid policy tightening and structural reforms.
“We expect the government to cut its 2014 growth target to 7 percent at the Central Economic Working Conference to be held in the next week or two,” Zhang said.