BEIJING, (Reuters) – Activity in China’s services sector picked up to a 14-month high in March as demand improved at home and abroad, a private business survey showed on Wednesday, adding to signs that government stimulus policies are gradually kicking in.
But analysts cautioned it is too early to tell if China’s economy has turned the corner, with many businesses cautious on whether there will be much improvement in a year’s time.
Caixin/Markit - Services - Managers - Index - PMI
The Caixin/Markit services purchasing managers’ index (PMI) rose to 54.4, the highest since January 2018 and up from February’s 51.1, a fourth-month low. The 50-mark separates growth from contraction.
Survey respondents said activity was being buoyed by stronger demand, new state policies and improved access to financing.
Findings - Line - Gauge - Sector - Sunday
The findings were largely in line with those of an official gauge on the non-manufacturing sector released on Sunday, which showed services activity picked up in March as new orders rose more quickly. Construction, in particular, showed strength, likely reflecting government efforts to fast-track more infrastructure projects to kindle domestic demand.
Also, both official and private manufacturing surveys unexpectedly returned to growth in March, fueling hopes that China’s downturn may be bottoming out.
China - Fundamentals - March - Demand - Employment
“In general, China’s economic fundamentals recovered in March, with domestic and external demand as well as manufacturing employment improving,” Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, said in a commentary released alongside the Caixin data.
“However, business sentiment has remained cautious, and inflation was subdued … More evidence is needed to determine whether the Chinese economy has stabilized,” Zhang said.
China - Services - Sector - Slowdown - Manufacturing
China has been banking on the services sector to cushion the slowdown in manufacturing, which...
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