Business News : China official services PMI retreats in April

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BEIJING (Business News) - China's non-Manufacturing Purchasing Managers' Index (PMI) showed on Thursday that the services sector cooled last month, retreating from March's ten-month high to hit 56.1 in April.


The softer reading underscores the two manufacturing PMI figures for April -- one official, one from HSBC -- which showed weakness among smaller enterprises despite improved headline figures.

The China Federation of Logistics and Purchasing revised its index last month to reflect seasonal adjustments, with the revision helping push the March index to 58, the highest since May, 2011.

A PMI reading below 50 indicates contracting activity while a reading above 50 shows expansion.

The new orders sub-index also retreated, slipping to 52.7 from 53.5 in March. That primarily reflected a drop in the sub-index for the construction industry, the federation noted, while new orders in the services industry, hotels, water and air transport all rose.

The real estate new orders sub-index remained in contraction, at 46.5, "demonstrating that the property market is still depressed."

Increased output by China's big factories helped lift the official manufacturing PMI in April to an 11-month high of 53.1. But the sub-index showed credit-constrained small factories still struggling.

HSBC's separate survey remained below the threshold dividing expansion from contraction for a sixth month running.

The services PMI index is intended to provide a snapshot of conditions in the services sector, which accounts for less than 45 percent of China's economy, a much smaller share than in developed countries.

China's economy faces formidable headwinds as exports falter due to weakening demand in the United States and Europe, alongside a downturn in the once red-hot property sector in response to tightening steps by Beijing.


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