Growth at China’s services companies picked up in January on firmer client demand as the sector’s pace of growth hit its highest level in almost six years, according to an independent gauge of activity.
The Caixin-Markit services purchasing managers’ index rose to 54.7 in January, from 53.9 in the previous month and marking the sharpest increase in activity since May 2012 . Last month’s figure pushed the gauge further above the 50-point level separating expansion from contraction.
Services companies reported rising headcounts on greater business demand as new orders hit a 32-month high, the survey found. The services sector had a slightly less optimistic outlook for the next 12 months, with sentiment dipping to a four-month low. “Caixin PMI readings in January showed that the Chinese economy had a good start to 2018.
Looking forward, we should watch for stability of demand in the manufacturing industry and the impact of growing costs on the profitability of service providers,” said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
The services gauge figure, together with a reading of 51.5 for the manufacturing sector in January, resulted in a composite PMI of 53.7, a seven-year high. That was up from 53 in December The Caixin-Markit gauge tracks smaller, private companies in contrast to the official indicator, which focuses primarily on larger, state-owned firms.