Beijing, China (4E) – A measure of China’s nonmanufacturing sector activity fell in January, a signal that the economy is cooling amid efforts by the country’s communist leaders to push through with planned reforms.
The China Federation of Logistics and Purchasing reported on Monday that the nonmanufacturing Purchasing Managers’ Index (PMI) slid to 53.4 in January from 54.6 in December. A reading above 50 signals expansion of the sector, while a reading below indicates contraction.
The services sub-index fell to 51.5 last month from 52.5 in December, and the reading for the construction sector declined to 61.0 from 62.6, according to the federation.
The subindex for new orders dropped marginally to 50.9 from 51 in December, a reflection of fragile domestic demand. The export orders index bounced back slightly in January, with the corresponding gauge posting 50.1, higher than December’s 49.4 level.
The index for business activity stayed strong despite slowing to 58.1 in January from 58.7 in the previous month. Non-factory sector employment conditions continued to be weak, as the index fell to 50 from 51.4 in December.
Monday’s results are based on responses by purchasing executives from 1,200 companies to monthly questionnaires across in 27 nonmanufacturing sectors.
The official manufacturing PMI dropped to 50.5 in January from a 51 reading in December, according to the federation’s report on Saturday.