China services rebound in August
Will increase pressure on the government to unveil more pro- growth policy measures The economy still faces downside risks to growth in the second half fromthe property sector... policymakers should use further easing measures to help support recovery.”
China’s service industries strengthened in August, contrasting with declining manufacturing gauges and suggesting a transition away from factory- led growth.
The non- manufacturing Purchasing Managers’ Index advanced to 54.4 from 54.2 in July, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing.
A separate services gauge from HSBC Holdings Plc and Markit Economics surged to a 17- month high of 54.1, from 50 in July. Readings above 50 for both gauges indicate expansion.
Chinese stocks added to gains on optimism a rebound in services growth will help offset a pullback in manufacturing and a property slump. China’s weakening real- estate market has weighed on related industries, raising concern the government will miss its expansion target of about 7.5 per cent this year.
Downside risks
“The economy still faces downside risks to growth in the second half of the year from the property sector slowdown,” Qu Hongbin, HSBC’s chief China economist in Hong Kong, said in a statement. “We think policymakers should use further easing measures to help support the recovery.”
August data point to divergent trends in employment across manufacturing and services, according to a statement from HSBC and Markit.
TheMSCI Asia Pacific Index of stocks climbed 0.5 per cent at 10: 42am Hong Kong time. The Shanghai Composite Index was up 0.8 per cent and Hong Kong’s Hang Seng Index rose 1 per cent.
Manufacturing gauge
The manufacturing PMI, also released by NBS and CFLP earlier this week, fell to 51.1 in August from 51.7 in July, missing the 51.2 median estimate of analysts.
A separate manufacturing gauge given September 1 from HSBC and Markit was 50.2, also falling from 51.7 in July.
Services accounted for 46.6 per cent of gross domestic product in the first half of 2014, 1.3 percentage points higher than the same period a year earlier, the statistics bureau said in July when it released second- quarter GDP data.
The official services PMI rose even as separate indexes for new orders, prices and expectations fell, suggesting that conditions “continue to be on the soft side,” Dariusz Kowalczyk, senior economist at Credit Agricole SA in Hong Kong, said in a note.