China’s service industries showed the first pick-up in growth since March, adding to signs the world’s second-largest economy may be stabilizing after a two-quarter slowdown.
The non-manufacturing Purchasing Managers’ Index rose to 54.1 in July from 53.9 in June, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. An official gauge of manufacturing released Aug. 1 showed an unexpected expansion.
Faster growth in non-manufacturing industries may bolster Premier Li Keqiang’s confidence that China can achieve its 2013 target for expansion in gross domestic product amid a campaign to rein in financial risks and control local government debt. State Council measures to help small businesses and the overhaul of the value-added tax system will provide more support for services companies, according to Barclays Plc and Reorient Financial Markets Ltd.
“The services sector PMI has been doing much better than manufacturing for some time and the corporate expectations index was at its highest this year, which shows confidence is returning,” said Steve Wang, Reorient’s Hong Kong-based chief China economist. “The PMI is supposed to be a leading indicator so we are witnessing a stabilization and a sign the economy isn’t slowing down at a faster rate.”
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