China's service sector expanded at the fastest pace in four months in February, helped by stronger growth in incoming new work, a survey by Markit Economics revealed Monday.
The seasonally adjusted HSBC business activity index for the service sector rose to a four-month high of 53.9 in February from 52.5 in January. A PMI reading above 50 indicates expansion of the sector and below 50 suggests contraction.
The rate of new business growth reached an eight-month high in February, Markit said. The report also noted that greater inflows of new business and planned business expansions contributed to a modest rise in service sector staff numbers.
Costs faced by service providers increased solidly during the month with the rate of inflation reaching a three-month high. Despite higher costs, service sector companies left their output charges broadly unchanged.
On the other hand, a survey conducted by the China Federation of Logistics and Purchasing on behalf of the National Bureau of Statistics revealed Saturday that the non-manufacturing sector contracted in February with the purchasing managers' index falling to 48.4 from 52.9 in January.
According to Markit survey, the composite output index, that measures the performance of both manufacturing and service industries, rose to 51.8 rebounding from 49.7 in the previous month. The survey report noted that the overall expansion reflected a broad stabilisation of manufacturing production and stronger growth of service sector activity.
Premier Wen Jiabao said earlier today that China will aim for 7.5 percent economic growth this year, lowering the growth target from 8 percent for the first time since 2004. The inflation target was unchanged at 4 percent.
The economy expanded 9.2 percent in 2011, easing from 10.4 percent in 2010. Last month, the People's Bank of China decided to cut the banks' reserve requirement rate by 50 basis points for the second time in three months to boost lending amid sluggish economic growth.
by RTT Staff Writer
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