- June services PMI at 56.7 vs May's 55.2
- New orders sub-index at 53.7 is year's
highest reading
- CFLP says official PMIs indicate economy
stabilising
- Market expectations remain for more
pro-growth policy easing
BEIJING, July 3 (Reuters) - China's services
sector expanded at its fastest pace in three months in June, an official
survey showed on Tuesday, but left intact market expectations that Beijing
will deliver more policy measures to support growth in the near future.
The latest survey by the National Bureau
of Statistics and the China Federation of Logistics and Purchasing (CFLP)
showed the purchasing managers' index for the country's non-manufacturing
sector rose to 56.7 from 55.2 in May, the best reading since a 10-month
high of 58.0 recorded in March.
A reading above 50 indicates expanding
activity and one below 50 signals contraction, according to the survey
methodology.
The reading from the services sector
follows two PMI surveys of China's vast manufacturing industry showing
factory activity fell to a seven-month low in June, dampened by both external
and domestic weakness. (nB9E8FA024)
China's fast-growing services industry,
which accounts for about 43 percent of output in the world's Number 2 economy,
has so far weathered the global slowdown much better than the factory sector.
"The index shows stable and steady
growth momentum of China's services sector. Taking the official PMI indexes
under consideration, they all indicate that China's current economic growth
shows signs of stabilising," Cai Jin, a vice president at the CFLP,
said in a statement accompanying the index.
China's official manufacturing PMI for
June confounded market expectations of slippage into contrationary territory
and clung to an expansionary reading of 50.2 when it was published on July
1 - albeit at a seven month low.
A sub-index measuring new orders for
the services sector r ose to 53.7 in June from May's 52.5, t he highest
level so far this year, according to CFLP's Cai.
The input price sub-index fell to 52.1
in June from 53.6 in May, while prices charged h eld below 50 f or the
second straight month, at 48.6 versus May's 48.5.
Easing price pressures provice more room
to ease monetary policy without igniting inflation - a key worry for policymakers
in Beijing obsessed with managing the impact of costs on social stability.
Economists and traders expect the central
bank to move soon to cut the required reserve ratio (RRR) for banks again,
and many think another cut to borrowing rates is also possible later this
year.
China has lowered RRR in three 50-basis
point steps since November 2011, freeing up an estimated 1.2 trillion yuan
($190 billion) for fresh lending. It cut benchmark interest rates by 25
bps in early June to 6.31 percent in a surprise move - its first cut since
the depths of the global financial crisis.
On the fiscal front, Beijing has fast-tracked
investment projects and rolled out new incentives to spur consumer spending
on energy-efficient products.
(Reporting by Beijing Economics Team;
Editing by Nick Edwards) ((yan.jiang@thomsonreuters.com)
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