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China services activity hits seven-month high in November
By Michele Maatouk
Date: Wednesday 04 Dec 2019
LONDON (ShareCast) - (Sharecast News) - Activity in China's services sector picked up more than expected in November, according to data released on Wednesday.
Caixin's services purchasing managers' index ticked up to 53.5 from 51.1 in October, beating expectations for a reading of 51.2 and marking the fastest expansion since April. A reading above 50.0 signals expansion, while a reading below indicates contraction.
Caixin's composite manufacturing and services PMI rose to 53.2 last month from 52.0 in October. This marked the best reading in 21 months.
Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, an affiliate of Caixin Global, said: "China's economy continued to recover in November, as domestic and foreign demand both improved. But business confidence remained subdued, reflecting the impact from uncertainties generated by the China-US trade conflicts. That will restrain a recovery in economic growth.
"The trade dispute is the major reason behind the slowing economic growth this year and will become a key factor affecting the stabilisation and recovery of China's economy next year."
Freya Beamish, chief Asia economist at Pantheon Macroeconomics, said: "The index was due a bounce, though we hadn't expected this much. The index is seasonally adjusted, but it's very hard to gauge accurately the impact of events such as singles day, which are rapidly evolving each year.
"At the same time, the index is very volatile. Like its official counterpart, the Caixin services PMI appears to have been strongly affected by the event. Admittedly, the November increase is roughly consistent with the upshoot in the Caixin manufacturing PMI in recent months, but the relationship is only loose. The pace of increase in new work picked up in November, but we aren't confident of the leading properties."