Service sector grows slower
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China.org.cn, August 4, 2011
The growth of China's service industry slowed for the second time in a row in July, yet activities in the sector continued to expand, the HSBC Business Activity Index showed Wednesday.
The seasonally adjusted indicator of the service sector in China, stood at 53.5 for July, down from the 54.1 in June and 54.3 in May.
A reading above 50 means expansion, while a drop if it stands below 50.
By comparison, the HSBC Purchasing Managers' Index, a composite indicator of operating conditions in the manufacturing sector, dropped to 49.3 in July from June's 50.1. It was the first time in a year that the index fell below 50.
"The growth in service sector activities moderated in July due to monetary tightening and property cooling measures," said Qu Hongbin, chief economist for China at HSBC. "Despite the slowdown, the service sector continued to expand steadily on resilient consumer consumption."
The survey also showed easing inflationary pressure as the component index of average input costs moved at the slowest pace in five months.
But growing competition for new business forced service providers to raise their expenses only fractionally so that output cost inflation grew at a one-year low.
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