BEIJING, April 3 Activity in China's services
industry rose to a four-month high in March, a private survey
showed on Thursday, even as persistent weakness in manufacturing
has reinforced fears of a sharper-than-expected economic
The Markit/HSBC Services Purchasing Managers' Index (PMI)
increased to 51.9 in March from February's 51.0, buoyed by
strong employment, a second successive rise taking it further
above the 50 level that separates expansion from contraction.
Earlier, the official services PMI showed a slight dip in
the sector's growth in March, to 54.5 from February's 55.0, but
activity remained well in expansion territory.
"The HSBC China Services PMI suggests a modest improvement
of business activities in March, with employment expanding at a
faster pace," HSBC chief China economist Hongbin Qu said in a
statement accompanying the release.
"However, combined with the weaker manufacturing PMI
reading, the underlying strength of the economy is softening,
which should ultimately weigh on the labour market."
The pick-up in services contrasts with a run of weakening
economic indicators this year. On Tuesday, two surveys showed
manufacturing struggled in March, with activity at smaller,
private firms contracting for the third month in a row.
On Wednesday, China's cabinet said it would accelerate
construction of rail projects and cut taxes for small firms, in
what appear to be the first steps it has taken this year to
steady the economy.
Premier Li Keqiang had said last week the necessary policies
were in place and the government would push ahead with
infrastructure investment. Economists at top
government think-tanks believe some of this spending is already
The Markit/HSBC PMI found that service-sector firms remained
very optimistic in March, generally expecting business activity
to be higher than current levels in one year.
Services made up 46.1 percent of gross domestic product in
2013, having overtaken manufacturing as China's biggest employer
in 2011. It has weathered the global slowdown much better than
the factory sector.
(Reporting By Adam Rose; Editing by John Mair)