China's non-manufacturing industries, those largely in the service sector, are reeling from a prolonged slowdown, indicating downside risks for the broader economy.
The purchasing managers index for the service sector fell sharply to 49.7 percent in November from 57.7 percent in October, said the China Federation of Logistics and Purchasing (CFLP). This was the second lowest reading this year, only slightly higher than the 44.1 percent registered in February.
The index provides a snapshot of the business climate in the sector and other nonmanufacturing businesses. A reading above 50 percent indicates expansion.
"Tepid consumptions in the off-season and sluggish demand in the construction sector combined to weigh down the index," said Cai Jin, Vice President of the CFLP.
"Overall, the latest reading results from the government's tightening policies to curb inflation, and the country should make greater efforts to keep the economy on a steady and sound track," said Cai.
But the CFLP expected the service sector to gradually pick up steam as the upcoming New Year and traditional Spring Festival will help revive domestic demand. |