China’s services industries expanded at the fastest pace in four months in January, a private survey found, supporting a recovery in the world’s second-biggest economy.
The services Purchasing Managers’ Index released by HSBC Holdings Plc and Markit Economics today rose to 54 from 51.7 in December. A reading above 50 indicates expansion. A separate government-backed survey published on Feb. 3 showed services industries expanded at the fastest pace since August.
Today’s report adds to signs that growth will accelerate for a second quarter after an almost two-year slowdown. The government is counting on expansion of services and domestic demand to become a bigger part of the economy as it tries to reduce the reliance on exports and investment spending.
“China’s growth recovery is now on a firmer footing,” Qu Hongbin, chief China economist for HSBC in Hong Kong, said in today’s statement. “Still-solid job gains plus higher business expectations bode well for further improvement of services sectors’ growth.”
The Shanghai Composite Index, China’s benchmark stock gauge, fell 0.8 percent at 10:35 a.m. local time. It had risen 24 percent from Dec. 3 through yesterday.
China’s economy expanded 7.9 percent in the final three months of 2012 from a year earlier, reversing a seven-quarter deceleration. Full-year expansion was 7.8 percent in 2012, the weakest pace in 13 years.
The pace may pick up to 8.1 percent in the first quarter, according to the median estimate in a Bloomberg News survey of analysts last month.
A separate non-manufacturing purchasing managers’ index (SHCOMP) rose to 56.2 in January from 56.1 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said this week, the highest level in five months.
The federation’s manufacturing PMI released Feb. 1 showed a fourth month of expansion and a separate gauge from HSBC and Markit rose to the highest level in two years.
Services industries, which include retailing, telecommunications and transportation, accounted for 45 percent of gross domestic product last year, up from 41 percent in 2003. The government is seeking to increase the share to 47 percent by 2015. The proportion is about 90 percent in the U.S.
The HSBC-Markit survey is based on data compiled from monthly replies to questionnaires sent to purchasing executives in more than 400 private services companies, according to today’s statement.
The statistics bureau said today it’s expanding the sample size for its services survey to about 8,000 companies from 1,200. The agency said it will release an index for the larger group at an unspecified date. The NBS’s manufacturing index for January was based on a pool of 3,000 respondents, more than triple the previous number.
--Zheng Lifei, with assistance from Rina Chandran in Singapore. Editors: Scott Lanman, John Liu
To contact Bloomberg News staff for this story: Zheng Lifei in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Panckhurst at email@example.com