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Investing.com-- Chinese service sector activity grew more than expected in November, a private survey showed on Tuesday, recovering from lulls seen earlier this year as persistent stimulus measures from Beijing helped improve local demand.
The Caixin China Services Purchasing Managers Index (PMI) rose 51.5 in November, blowing past expectations for a rise of 50.7. The reading also recovered sharply from the 50.4 seen in October, which saw the index come within sight of contraction territory.
A reading below 50 indicates contraction.
China’s services sector was a sole bright spot in the economy this year, expanding for 11 straight months as services demand remained steady. Growth in the sector also helped somewhat offset weakness in the manufacturing sector, which was reeling from a decline in local and overseas demand.
Tuesday’s data showed that local demand was picking up, while Chinese service providers also saw some improvement in export demand.
But the Caixin data also noted that growth in business activity remained modest in comparison to pre-COVID levels, while employment remained in contraction as businesses stayed wary of hiring.
Still, the positive services PMI signaled some strength in Chinese business activity, and also came just a few days after a stronger-than-expected reading on manufacturing activity.
The Caixin surveys largely contrasted government PMI readings released last week, which showed that Chinese manufacturing activity shrank in November, while non-manufacturing activity came close to contraction.
But the Caixin survey also differs from the government reading in its scope of businesses covered- wherein it focuses more on smaller, private enterprises, as opposed to the bigger, state-run enterprises covered by the official survey. Investors usually use both surveys to get a broader picture of the Chinese economy.
Along with the positive Caixin Manufacturing PMI released last week, Chinese business activity saw a modest rebound in November.
A bulk of this rebound was spurred by consistent liquidity injections by Beijing, which now has a 1 trillion yuan ($139 billion) bond issuance lined up in the coming months.
Chinese services activity rebounds in Nov as demand improves- Caixin PMI