China’s non-manufacturing sector continues to improve

China’s non-manufacturing sector continued to improve in December, adding to signs of a rebound in the world’s second largest economy, an official survey showed Thursday.

The Purchasing Managers Index (PMI) of the non-manufacturing sector was 56.1 percent in December, up 0.5 percentage points from November, the China Federation of Logistics and Purchasing (CFLP) said.

The figure marked a rise of three consecutive months. A PMI reading above 50 percent indicates expansion from the previous month, while a reading below 50 percent indicates contraction.

Cai Jin, vice chairman of the CFLP, said that the figure showed a continued rebound and accelerating growth in the non-manufacturing sector.

The figures followed Tuesday’s release of the manufacturing sector PMI, which remained unchanged at 50.6 percent from November but was the third consecutive month for it to stay above 50 percent.

With economic data improving in recent months, many economists have projected a growth rebound in China in the last quarter of the year.

Flagging exports and government measures to contain inflation dragged down the economy’s growth to 7.4 percent in the third quarter, the slowest pace in more than three years.

Most of the sub-indices saw gains in December, with the sub-index for new orders hitting the year’s high at 52.5 percent, according to the CFLP.

The sub-index for new export orders stayed above 50 percent for the second months, while the employment sub-index rose for the third straight month to reach 52.1 percent.

The sub-index for intermediate input prices gained 1.3 percentage points month on month to 53.8 percent due to bad weather and festivals such as Christmas.

Two sub-indices, including that for business activity expectations and in-hand orders, either stayed unchanged or dropped from the previous month.

In terms of industries, the service and infrastructure industries are expected to play a bigger role in shoring up growth, according to the CFLP.

As the PMI and new order sub-index continued to run at high levels, the service industry has become a main driver of the non-manufacturing sector.

The infrastructure industry PMI stayed above 60 percent for the third month, and its new order sub-index reached the year’s new high, indicating a fast growth pace in infrastructure investment in months to come.

To buoy the economy, authorities have earlier in the year introduced a string of pro-growth measures, including approving massive construction projects and cutting interest rates.

The CFLP’s non-manufacturing PMI is based on a survey of about 1,200 companies in 27 industries, including transportation, catering and software development.


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