China HSBC services PMI rises to four-month high

Mon Feb 4, 2013 8:56pm EST
 
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BEIJING (Reuters) - Growth in China's services sector hit a four-month high in January, a private survey showed, as a better business climate increased deal-making and lifted corporate confidence to an eight-month peak.

The HSBC services purchasing managers' index (PMI) rose to 54 in January, up from December's 51.7, moving more comfortably into territory above the 50-point threshold that separates accelerating from slowing growth.

The survey's findings added to evidence that the world's second-biggest economy is gradually rebounding, with analysts expecting China's economic growth to inch up to 8.1 percent this year, off a 13-year low of 7.8 percent hit in 2012.

Encouragingly, the survey showed service sector firms thought good times could last.

The business expectation index -- one of many accompanying sub-indices that do not contribute to the overall PMI business activity reading for the services sector -- rose to its highest since May 2012 at 64.4.

Nearly a third of the firms polled said they expect business to expand in a year.

"China's growth recovery is now on a firmer footing," said Qu Hongbin, a HSBC economist. "Solid job gains plus higher business expectations bode well for further improvement of the services sector's growth."

The services sector made up 46 percent of China's gross domestic product in 2012, as big as the manufacturing industry and a long way from its 17 percent contribution in 1990.

Tuesday's PMI, the last of five from China in any month, is in line with other surveys released last week that showed a stabilising Chinese economy poised for a modest recovery.   Continued...