China July service sector growth eases, employment falls for first time in four months: Caixin PMI
BEIJING Aug 3 (Reuters) - - Growth in China's services sector cooled in July, with weaker expansions in activity and new work prompting companies to shed staff for first time in four months as they looked to cut costs, a private survey showed on Wednesday.
The findings contrast with a more upbeat official survey on Monday, raising concerns that China is still facing hurdles to its plans to transform the economy into one more reliant on domestic consumption than heavy industry and exports.
The Caixin/Markit services purchasing managers' index (PMI) fell to 51.7 in July on a seasonally adjusted basis, from an 11-month peak of 52.7 in June.
While still above the 50 mark that demarcates expansion from contraction on a monthly basis, a breakdown of the activity index showed growth momentum was slowing broadly, while employment fell, albeit at a modest rate.
"All of the index categories showed signs of deterioration, with employment falling back into contraction territory after three consecutive months of growth," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
Cost-cutting programs and the non-replacement of voluntary leavers both contributed to lower workforce numbers, IHS Markit cited survey respondents as saying.
Beijing has been counting on a growing services sector to pick up the slack as it tries to restructure the economy and cut overcapacity in industrial sectors such as steel and mining. A prolonged downturn in those areas and stubbornly weak exports have helped pull economic growth to its lowest in 25 years.
Caixin's July manufacturing survey, by comparison, was stronger than its official counterpart, raising hopes that the effect of government stimulus spending was starting to benefit smaller private firms as well as larger state-backed ones. Continued...