China February HSBC Services PMI up to 52

Activity in China’s services sector grew modestly in February as new orders rose at their quickest pace in three months, a private survey showed just a few days after the central bank cut interest rates to stimulate the world’s second-largest economy.  The HSBC/Markit Services Purchasing Managers’ Index(PMI) picked up to 52.0 last month from January’s 51.8 and remained above the 50-point level that separates contraction from growth in activity on a monthly basis.

A sub-index for new orders rose to 52.2 in February from 51.2 in January and the sub-index measuring new business also rose.  “The solid rise in new orders suggests that activity growth may pick up in the months ahead, as firms continued to add to their payroll numbers amid a positive business outlook,” said Annabel Fiddes, Economist at Markit.

Official surveys showed on Sunday that growth in the services sector picked up to 53.9 last month from January’s 53.7, which the National Bureau of Statistics attributed in part to strong holiday spending during the Chinese New Year.  Accounting for 48 percent of China’s $10.2 trillion economy last year, the services sector has weathered the growth downturn better than factories have, partly because it depends less on foreign demand.