Activity in China’s services sector expanded at its slowest rate in 17 months in December, a private survey showed on Wednesday, in a further indication that the world’s second-largest economy may be losing steam.
Advertisement
The Markit/CIPS UK manufacturing PMI declined to 51.9 last month, down from 52.5 in November and 55.5 in October. The headline Nikkei South Korea Manufacturing PMI indicates overall improvement of sector operating conditions at 50.7 in December, up from 49.1 in November, signalling an improvement in operating conditions at South Korean manufacturers for the first time in ten months.
An index for new orders was up from 53.5 to 54.2, which was its highest reading in 10 months, which was helped through price discounting.
In 2014, services accounted for 65 percent of Japan’s gross domestic product, while manufacturing had a 21 percent share.
In Australia, the AIG services index for December came in at 46.3, down from 48.2. A reading above 50 denotes expansion.
More disappointing data: the ISM Manufacturing PMI dropped to 48.2 points in December, deeper in contraction territory.
Service sector activity hit a 17-month high as new business continued to grow at a robust pace and firms in this sector were feeling more optimistic about their outlook for the next 12 months than at any point since March 2015.
“Growth momentum is stabilising somewhat, however, as the index remained below 50 for five consecutive months, the manufacturing sector is still facing strong headwinds, ” said Zhou Hao, an economist at Commerzbank in Singapore. The only in the positive in the report was the fact that manufacturers hired additional workers on the back of expectations that the growth in the Indian economy would pick up going forward. Economists said the PMI survey does not always correlate with industrial production and the latest data should not be seen as an alarm signal of industrial slowdown.
Orders are still growing, but at their slowest pace of the recovery, since September 2009. As a result, purchase prices rose in December. But firms added new jobs at the fastest rate since May 2011 anticipating better business this year.
Advertisement
Their overall costs continued to rise, largely due to higher salaries, but increased competition meant they had to cut selling prices for the fourth month running.
