China’s services sector grew at its fastest pace in three months in December as new orders remained strong, a private survey showed, an encouraging sign of strength even as manufacturing activity slows and the property market softens.
The HSBC/Markit Services Purchasing Managers’ Index(PMI) picked up to 53.4 last month from November’s 53.0, well above the 50-point level that separates growth from contraction in activity on a monthly basis.
A sub-index measuring new business cooled slightly to 53.9 in December from a 2-1/2 years high of 54.2 in November, but remained well in expansion territory.
The labor market was also buoyant. The employment sub-index hit a 18-month high in December as companies expanded. Chinese leaders suggested last year they could tolerate somewhat slower economic growth as long as labor markets remained resilient.
But services firms were not so optimistic on the outlook. A sub-index for business expectations for the year ahead dipped to the lowest level since August 2014, with many firms saying increasing competition was dampening their pricing power.