BEIJING (Reuters) – China’s services activity grew at the fastest pace in three months in October, helped by early signs that Beijing’s big stimulus measures were helping improve business conditions, a private sector survey showed on Tuesday.
The Caixin/S&P Global Services Purchase Managers’ Index (PMI) grew to 52.0 in October from 50.3 the month before. The limit of 50 separates growth from shrinkage on a monthly basis.
That matched the official PMI published last week, which showed the non-manufacturing sector, including services and construction, was expanding again.
China’s economy grew at its slowest pace since early 2023 in the third quarter, with the crisis-hit real estate sector showing little sign of stabilizing as Beijing races to meet its growth target this year.
Beijing launched monetary stimulus and support measures for the real estate sector in September. Shortly afterwards, a meeting of top leaders of the Communist Party, the Politburo, pledged “necessary spending” to get growth back on track.
The survey showed that new production increased marginally from 51.0 in September to 52.1. However, the growth of the inflow of new companies from abroad decreased.
The capacity pressure was seen as new production being added to the work backlog. As a result, service providers increased their employment for the second month in a row.
Input price growth slowed to the lowest level in three months, although companies are still struggling with rising material and energy costs.
Overall confidence rose to the highest level in five months, with some companies stepping up their promotional efforts to support sales growth in the coming year.
Along with the manufacturing PMI, the Caixin/S&P Global Composite PMI rose to 51.9 from 50.3 in September.
Recent figures have pointed to increased deflationary pressures, weaker export growth and subdued loan demand, warning signs of an economic recovery.
“Achieving China’s 2024 growth target will depend on a sustainable recovery in consumer demand. This means that policy efforts should focus on increasing households’ disposable income,” said Wang Zhe, Senior Economist at Caixin Insight Group.
(Reporting by Liangping Gao and Ryan Woo; Editing by Sam Holmes)
