Growth in China’s services sector fell to the lowest level for 21 months in September as the pace of new business cooled, a private survey showed.
The survey was in sharp contrast to an official gauge of the non-manufacturing sector that showed the services sector expanded at the fastest clip since 2014 in September, blurring the picture on how a key part of the economy is performing, reports Reuters.
The Caixin/Markit services Purchasing Managers’ Index (PMI) fell to 50.6 in September, the lowest reading since December 2015 and one of the weakest since the survey began in 2005.
A reading above 50 indicates growth, and any lower than that signals contraction. The index had hit a three month high of 52.7 in August.
New business in September grew at a slower pace than in the previous month but was still relatively solid with a reading a 52.0, while backlogs of work declined for the first time in five months and hiring slowed.
Caixin’s composite manufacturing and services PMI, also released on Monday, fell to 51.4 in September from 52.4 in August and was the lowest since June.
Official measures on both the manufacturing and services industries for September showed growth in both sectors at multi-year highs.
China’s economy grew by a stronger-than-forecast 6.9 per cent in the first half of the year and is expected to easily beat the government’s full-year target of around 6.5 per cent, even if growth fades a bit in coming months.