China Services Growth Slid Down In February but Outlook Remains Optimistic

The services sector in China slightly slid down but it remained steadfast in February that induced corporations to hire additional workers in a period of 18 consecutive months, according to the private business survey.

The Caixin/Markit services purchasing managers’ index (PMI) declined to 54.2 in February since the start of the year exceeding over 5 years high to 54.7. Nonetheless, it was still able to move higher than the recent trend and maintained above the 50-mark which separates growth from contraction.

Lunar New year was said to have a large effect in readings of China in early 2018 even after seasonally adjusting it. Moreover, the week-long holiday happened to be in the month of February, which could have contributed to the growth of new businesses at the slowest pace in three months.

A lot of business began to size down their operations prior to the closing in the entire holiday or even further.

Consumer spending on services soared higher due to the festivities as the retail and catering sectors gained 926 billion yuan or $146 billion) during the holiday.

In another 12 months, the business outlook is presumed to pick-up from a four-month low through new marketing plans, scheduled projects and forecast the current market condition will continue to be in a positive direction.

The official data on non-manufacturing sector published in the previous week has supported the optimistic outlook and solves the long-term recondition and revised the economic growth concept into one pushed by consumption more than heavy industry, exports, and investments.  

The government has been reliant growth in high value-added sectors such as finance and technology.

The overall economic growth of the second biggest GDP growth will average around 6.5 percent from 6.9 percent in 2017 amid the cooling of the property market and officials curbing risks on financial activity that boosts borrowing costs.