BEIJING (Reuters) – Activity in China’s service sector grew at a slightly faster pace in October, a private survey showed on Friday.
The services PMI index calculated by Caixin/S&P Global rose last month to 50.4, compared to 50.2 in September, above the threshold of 50 separating contraction and expansion of activity.
The services sector rebounded strongly earlier in the year, but analysts say weak growth in household incomes and lingering uncertainties in the jobs market raise questions about the sustainability of growth in the sector.
“The services sector, closely linked to youth employment, is returning to a level close to what it was before the COVID-19 pandemic,” said Xing Zhaopeng, chief strategist at ANZ.
“However, it is unlikely that we will see a rebound greater than expected in this sector,” he said.
New orders rose last month at their slowest pace in ten months, the survey showed. External demand continued to improve, driven in particular by the resumption of tourism.
The slowdown in sales, which grew at their slowest pace in ten months, weighed on recruitment campaigns. Employment in the sector remained stable in October after increasing over the previous eight months.
The composite PMI index calculated by Caixin/S&P, which brings together activity in the manufacturing sector and that of the services sector, fell in October to 50.0, compared to 50.9 the previous month.
(Report by Ellen Zhang and Ryan Woo; by Camille Raynaud)
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