It’s a black hat-trick for China’s PMIs in October with manufacturing, non-manufacturing and now services all posting material fades. Here’s the HSBC services reading just out:
After adjusting for seasonal factors, the HSBC China Services Business Activity Index posted at 52.9 in October, down from 53.5 in September, and easing further away from August’s 17-month high. Nonetheless, the index remained consistent with a solid expansion of business activity that was stronger than the average seen in 2014 so far.
Activity growth was supported by an increased amount of new business placed at Chinese service providers in October. This was highlighted by a solid rate of new order growth that was little-changed from the previous month. According to panellists, the development of new projects and increased client demand had boosted new work intakes in the latest survey period.
Employment in China’s service sector increased for the fourteenth successive month in October. Though only modest, the rate of job creation edged up to the strongest since March, with a number of firms hiring additional staff in response to sustained new order growth. Backlogs of work meanwhile declined for the fourth successive month, with a number of companies linking the reduction to a combination of higher staffing levels and targeted efforts to reduce unfinished workloads.
Firm enough despite the fade and good employment growth so no stimulus necessary!
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
