China’s services industry—the biggest contributor to gross domestic product—remained in expansion mode last month but the pace of growth slowed, according to a private poll released on Wednesday.
The Caixin Purchasing Managers’ Index (PMI) dropped to 51.2 in February after hitting a six-month high of 52.4 in January.
A reading above 50 indicates activity is growing, while one below that level suggests a contraction.
Asian equity markets were mostly higher following the data, with China’s benchmark Shanghai Composite rising as much as 0.7 percent. The Australian dollar meanwhile, which is especially sensitive to Chinese data, was little changed around 73 US cents.
Declining growth in new orders contributed to weaker expansion in both business activity and employment, Caixin said in a statement, which also noted higher average input costs, weak job creation and rising layoffs.
For activity to really pick up in the sector, the government must take action, warned He Fan, Caixin’s chief economist.