The latest Caixin-Markit China services PMI reading fell 0.8 points to 51.2 in November, adding to doubts over the true state of China’s economic rebalancing and the reliability of the government’s economic data.
According to Markit, total new work placed at firms rose slightly in November with respondents indicating that “relatively weak market conditions had softened client demand in the latest survey period.”
With September 2015 excluded, the increase in new work was the slowest seen in the past 16 months.
Reflective of the slowdown, employment growth eased to the second-weakest level seen in the past 18 months. Markit noted that relatively subdued business conditions contributed to softer payroll growth.
Order backlogs contracted with respondents pointing to a general lack of pressure on operating capacity. Selling prices were also lowered for a third consecutive month, albeit the pace of decline was marginal.
As a result, optimism towards the 12-month business outlook improved only slightly from October’s record low, with many firms continuing to express concerns over a “challenging economic outlook.”
The result from the Caixin-Markit survey, a private sector gauge focused on small- and medium-sized firms, bucked the trend seen in the separate non-manufacturing PMI gauge released by the government earlier this week, which revealed activity levels across the nation’s services sector accelerated handsomely in November, rising to 53.6 from October’s 53.1.