The Chinese purchasing manager’s index for the service sector fell to 50.9 in December from 52.5 in November, the lowest level since August 2011.
China’s composite PMI, which measures business activity in both the services and manufacturing sector, fell to 51.2 in December, from 52.3 in November.
Anything above 50 signals expansion.
Services did see its strongest expansion of workforce numbers since June, but new order growth was the weakest in six months.
Still, we recently saw Chinese PMI improve for the fifth-straight month, and HSBC Chief Economist Hongbin Qu put a relatively sunny spin on the latest data.
“Despite the moderation of the headline China Services PMI index, which reflected slower new business growth, labour market conditions improved for the fourth month in a row,” said Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC. “We expect the steady expansion of manufacturing sectors to lend support to service sector growth. Moreover, the implementation of reforms such as lowering the entry barriers for private business in service sectors and the expanded VAT reforms should help to revitalise service sectors in the year ahead.”
Here’s the chart for the Composite PMI measurement: