China Services Activity Growth Accelerates

(RTTNews) - China's service sector growth accelerated to a three month-high in March on rising business activity and new orders, survey data from S&P Global showed on Thursday.

The Caixin services Purchasing Managers' Index logged 51.9 in March compared to 51.4 in February.

The index has remained above the crucial 50.0 no-change mark for the twenty-seventh straight month. Moreover, this was the highest score since December.

New orders grew at the fastest pace in three months, underpinned by supportive policies, marketing efforts and a broad improvement in demand conditions.

Further, there was another monthly reduction in the volume of backlogged work. Signs of spare capacity contributed to a renewed drop in employment in March.

Input prices increased in March due to higher staff expenses and greater supplier charges. Nonetheless, firms lowered their charges for the second straight month. The rate of discounting was the most pronounced in six months. Business sentiment among service providers remained upbeat in March. They hope that supportive domestic polices and business development efforts will boost sales and output over the coming twelve months. Supported by faster growth in output in both manufacturing and services, the composite output index registered 51.8 in March compared to 51.5 in the prior month.

The policy efforts of the government policy should focus on stabilizing employment, alleviating households' financial burdens, and increasing their disposable income, Caixin Insight Group Senior Economist Wang Zhe.

The economist said macroeconomic policies need to be more proactive and decisive as the external environment becomes increasingly severe and complex.