[BEIJING] Growth in China's services sector weakened to its lowest in three months in October as new business cooled, a private survey showed on Wednesday, reinforcing signs of a slowdown in the economy that could prompt policymakers to announce more stimulus measures.
The services purchasing managers' index (PMI) compiled by HSBC/Markit pulled back to 52.9 in October - the lowest since July - from 53.5 in September.
A reading above 50 in PMI surveys indicates an expansion in activity while one below that threshold points to a contraction.
A sub-index measuring new business dipped to 53.1 in October from 53.2 in October, but sub-indexes measuring employment and outstanding business both inched up, painting a mixed picture. "Overall, the service sector grew steadily in October as the underlying business conditions continue to look better than in the manufacturing part of the economy," said Qu Hongbin, chief China Economist at HSBC. "While this pattern will likely continue, we still expect further (policy) easing measures in the coming months to help offset the downward pressure on the economy." An official survey released earlier this week showed that the services sector grew at its slowest pace in nine months in October as the cooling property sector weighed on demand.
The services sector made up 46.1 per cent of gross domestic product in 2013, surpassing the secondary sector - manufacturing and construction - for the first time, as the government aims to create more jobs and boost domestic consumption.