Royston Carr Asset Management - China's efforts to boost economic growth may be hindered by slowdown in services sector.
Online PR News – 19-November-2018 – Taipei, Taiwan – According to a recent survey, Royston Carr Asset Management analysts say China's services sector reported its slowest expansion in more than a year in October as the number of fresh orders ran dry. Royston Carr Asset Management analysts believe the slowing growth in China's services sector confirms that the country's economic growth has lost momentum as a difficult year comes to an end.
China's services sector makes up more than half of China's economy and is a vital source of employment. Royston Carr Asset Management analysts say the decline in growth in services is cause for concern for policy makers who have been relying on the sector to prop up the economy as China copes with increased pressure on exports due to the bitter trade dispute with the US.
Last month, the Caixin/Markit services purchasing managers' index (PMI) dropped to 50.8 down from 51 the month before, edging closer to the 50 mark that divides expansion from contraction.
Royston Carr Asset Management analysts say any ongoing weakness in China's services sector will complicate the country's attempts to stabilize economic expansion in the midst of the escalating trade war, a decrease in manufacturing productivity and measures to limit pollution, debt and excess capacity.
This year China's property market, which is another significant contributor to the economy, has also slowed, causing demand for real estate services to decline.
Caixin's sub-index for new business orders revealed almost no growth at 50.1 in last month, down from 52.4 in September. Last month was the worst performance since the 2008 global financial crisis.