China April HSBC services PMI rises to 6-month high

Thu May 3, 2012 10:53pm EDT
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By Lucy Hornby

BEIJING (Reuters) - China's services sector enjoyed its busiest month in half a year in April, with business expectations at their highest level in 12 months, a private sector survey of purchasing managers showed on Friday.

The seasonally adjusted HSBC China Services Purchasing Managers Index (PMI) rose to 54.1 in April from 53.3 in March, its strongest reading since October 2011, and followed an uptick in HSBC's manufacturing PMI released earlier this week.

The rise in the HSBC services PMI was in contrast to a retreat in China's official services PMI - albeit from a higher level after revision to its methodology in March - which was weighed down mainly by a continuing downturn in the real estate sector.

Markit Economics, which compiles the HSBC-sponsored survey, detected a broad-based rise in key service sector indicators.

"April data signaled a further rise in new orders placed at Chinese service providers. Although below the long-run trend for the survey, the rate of new order growth was solid, and the sharpest in 10 months," Markit said in a statement of survey findings.

"Companies commented on better demand conditions, new product launches and the success of promotional campaigns."

Staff numbers in the services sector rose for a 39th consecutive month. April's rate of job creation was the sharpest since November 2011 and survey respondents typically attributed hiring to a rise in new business.

The robust showing for the services sector signals both a further incremental reorientation of the economy away from its reliance on investment-led factory output and that domestic demand may be stabilizing after a period of weakness.   Continued...

Employees make circuit boards at an electronic component factory in Hefei, Anhui province May 2, 2012. REUTERS/Stringer