China's non-manufacturing sector growth eased in July as inflow of new orders weakened, the latest survey by the China Federation of Logistics and Purchasing (CFLP) showed Friday.
The seasonally adjusted purchasing managers' index for the services sector fell to 55.6 in July from 56.7 in June. However, the PMI reading above 50 indicates expansion of the sector.
Signaling weak demand conditions both at home and abroad, the new orders index fell to 53.2 in July from 53.7 in the previous month.
Business expectations among services firms also eased somewhat during the month with the corresponding index falling to 63.9 from 65.5 in June.
The data adds to signs that the economy is slowing significantly mainly on account of the worsening debt crisis in Europe, which is one of China's major export markets. The economy grew just 7.6 percent in the second quarter, the weakest pace since the first quarter of 2009.
The slowdown in more evident in the manufacturing sector. The most recent CFLP survey of the factory sector showed that growth eased for the third consecutive month in July due to weak new order flows.
In contrast to the CFLP survey, a report from Markit Economics showed Friday that service sector in China expanded at a faster pace in July. The headline HSBC business activity index rose to 53.1 in July from 52.3 in June.
The composite output index, that covers both manufacturing and services, rose to 51.9 in July from 50.6 in June.
However, HSBC Chief Economist Hongbin Qu said the pace of expansion suggested by the composite PMI remained only modest and is not sufficient to warrant a meaningful recovery.
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