China’s private sector activity expanded for the first time in four months in November driven by services growth, survey data published by Markit showed Thursday.
The Caixin composite output index rose to 50.5 in November from 49.9 in October. The score exceeded the neutral 50 mark for the first time in four months.
“This shows that the macro economy has moved further toward stable growth and the economic structure is improving,” He Fan, chief economist at Caixin Insight Group, said.
“Future fiscal and monetary policies must be coordinated and large-scale stimulus should be avoided as much as possible,” the economist added.
Nonetheless, the services Purchasing Managers’ Index fell to 51.2 in November from October’s three-month high of 52.0. Meanwhile, manufacturing production stabilized in November, following a six-month sequence of reduction.
Total new orders placed at service providers increased only slightly in November as respondents said relatively weak market conditions softened client demand. In contrast, manufacturing firms saw a further decline in new business.
Employment generated by service providers continued to increase in November but the rate of job creation eased to a marginal pace that was the second-weakest for a year-and-a-half. Meanwhile, goods producers continued to cut their workforce numbers in November.
Outstanding business continued to fall across the Chinese service sector in November, while backlogs of work rose again at manufacturing companies at a moderate pace.
Increased competition for new work led services companies to reduce their selling prices for the third month in a row in November. Manufacturers also lowered their charges at a sharp rate. Consequently, output prices at the composite level fell at a solid pace that was the steepest seen in 20 months.
Service sector optimism towards the twelve-month business outlook improved only slightly from October’s record low, as a number of companies expressed concerns over a challenging economic outlook.
The material has been provided by InstaForex Company – www.instaforex.com