China's services sector grew in August at its weakest pace on record, a private survey showed on Monday, as new orders ebbed and tightening measures to rein in an exuberant property sector started to pinch. The slowdown in the services sector to below levels seen during the global financial crisis reinforces signs that the world's second-biggest economy is losing steam, even as global demand sputters.
While the services sector accounts for less than 45 percent of China's gross domestic product, similar PMI reports last week showed growth in its manufacturing sector has also cooled considerably, and even contracted according to one survey. The HSBC's Services Purchasing Managers' Index (PMI), which provides a snapshot of conditions in industries from restaurants to computing, slid to 50.6 in August from July's 53.5, said Markit, a British research firm that compiles the index.
The August reading was the lowest since the survey begun in November 2005 and was a touch lower than the previous trough of 51.2 during the global crisis. The 50-point level demarcates expansion from contraction. The figures are seasonally adjusted. A separate PMI for China's services sector, published by the China Federation of Logistics and Purchase, dipped to 57.6 percent in August from 59.6 percent in July as railway investment fell following a deadly high-speed train crash.