Activity in China’s services sector expanded at its fastest pace in three months in October, a private survey showed on Wednesday, easing concerns over persistent weakness in the world’s second-largest economy as the manufacturing sector falters.
The Caixin/Markit Purchasing Managers’ Index (PMI) rose to 52.0 in October from September’s 14-month low of 50.5, hitting the highest level since July 2015. A reading above 50 points signifies growth on a monthly basis, while one below that points to a contraction.
“This shows that previous stimulus policies have begun to take effect, while the economic structure steadily improved,” said He Fan, chief economist at Caixin Insight Group. “The economy has started to show signs of stabilizing, reducing the need for a further stimulus.”
A sub-index measuring new business jumped to 52.9 from September’s 50.5 while the employment sub-index also improved to a three month high.
Still, underscoring an uncertain economic outlook, business expectations moderated to a record low in October.