Services sector in China was again hit by a depression this September, a slight one this time, as a result of low market by new businesses, a private survey demonstrated on Wednesday. The news, though not significantly, reassures signs of slowdown in the world’s second largest economy and could prove important in prompting more reformatory measures.
The survey was published by HSBC/Markit, which stated that the services purchasing managers index (PMI) has retracted from a 17-month high of 54.1 in August to 53.5 in September. If the index reads anything below 50, it indicates a contraction in the market. Anything above this threshold signifies an expansion.
A sub-index of the survey that measures market growth of new businesses fell to the mark 53.5 in September from a 19 month high of 53.9 in August. However, sub-indexes measuring outstanding business and employment showed growth.
Another official survey that was released in the last week stated that services sector in China had grown at the slowest pace in the past eight months in September. This happened after the sector has received new orders on a relatively slower rate for the first time since the financial crises of 2008, exposing the weaknesses in the second largest economy of the world.
The services sector held nearly 46.1% shares of China’s gross domestic product in 2013, surpassing the manufacturing and construction sectors for the first time ever. Chinese government seeks to develop more number of jobs in this sector and boost domestic consumption of its services industry.