China’s services activity weakened in September, according to a major private survey released Tuesday.
The Caixin/Markit services Purchasing Managers’ Index (PMI) reached 51.3 last month, down from 52.1 in August, the lowest figure in seven months, according to Caixin Media Company.
But the composite Caixin PMI combining manufacturing and services activity hit 51.9 in September, the highest in five months, compared with 51.6 in August.
This has been attributed to a rising manufacturing PMI, which stood at 51.4 last month, up from 50.4 in the previous month.
A reading above 50 indicates expansion while one below indicates contraction.
The new order sub-index of services hit the highest level since February, 2018 due to stronger market demand and new product releases, respondents in the Caixin survey said.
But the new export sub-index of services slightly weakened in September, indicating that new services orders mainly come from the domestic market, according to survey results.
“The Chinese economy saw significant marginal improvement in September,” said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, a subsidiary of Caixin.
“After its quick deceleration in previous months, the Chinese economy has gradually had the foundation for stabilization.”
But he also said, affected by exchange rate fluctuations and rising labor and raw material costs, corporate costs have been on the rise, which has dampened corporate confidence.