China Services Sector Indicate Growth Strength as Country Introduce Reform
The growth in China services sector held a near one year high last November is another indicator of the strength of the government that is preparing to introduce another sweeping reform to restructure the second largest economy. Purchasing managers index for the non manufacturing sector decrease slightly to 56 in the month of November after being on a 13 month high of 56.3 in October.
It’s still a comfortable high which is above the 50 point threshold which separates the growth from the contraction and followed to other PME surveys that were done which also showed activity for manufacturers last month. Although the economy regained is momentum mid year after a slowdown it is expected to lose steam as the effect of the government support measures is fading and activity has remained resilient coming into December. New data showed that service companies received new orders last month even with the rate is increase has slowed down.
This move is seen as the strengthening of the government’s influence that pushes ahead with its agenda of reshaping the economy in hopes to boost domestic consumption through exports and investments. Signs of activities in some areas have softened in some area and price pressures moderated. Sub index fell to 49.5 from 51.4 in October which indicated price cuts along with the sub index for input prices retreating from 56.1 to 54.8.
Services industry accounted for 45 percent of the gross domestic output in 2012 and overtook the manufacturing sector as the biggest employer in 2011.