(Bloomberg) — A private survey showed China’s services sector grew less than expected, adding to concerns about the health of the economy.
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The Caixin China Services Purchasing Managers’ Index fell to 51.6 in August from 52.1 in the previous month, according to a joint statement from Caixin and S&P Global issued on Wednesday.
The median forecast of economists polled by Bloomberg was 51.8. A reading above 50 indicates expansion.
The findings add to a picture of an economy at risk of stagnation, with official data published over the weekend showing service industries from restaurants to tourism nearly shrank in the final month of summer. The sector is at the heart of a piecemeal government effort to revive consumer demand, which has been depressed by a prolonged property crisis.
The International Monetary Fund calls the services sector an “underutilized engine” of growth, contributing far less to China’s value added than the advanced economy average of about 75%.
The non-manufacturing measure of construction and services activity showed growth last month, boosted by consumer demand during the summer holidays, the National Bureau of Statistics said on Saturday. Unlike the official services PMI, the Caixin survey focuses more on smaller private firms.
The outlook for the country’s $17 trillion economy still hinges largely on prospects for manufacturing and exports, even as new obstacles to their expansion emerge. China’s factory activity shrank for a fourth straight month in August, the latest sign that the world’s second-largest economy may struggle to meet this year’s growth target of around 5%.
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