China's services sector grew at a slightly slower pace in February as the seasonally adjusted Caixin China General Services Business Activity Index eased to 54.2 in February from 54.7 in January, the fastest expansion in more than five years, data from Caixin and IHS Markit showed March 5. A reading above 50 signals expansion.
At the composite level, the Caixin China Composite PMI (which covers manufacturing and services) softened at 53.3 in February from a seven-year record of 53.7 in January, signaling continued expansion in overall business activity in February despite the slight weakening at the start of 2018.
While manufacturers registered a slightly stronger increase in new orders midway through the first quarter, growth in new business among services companies softened slightly. At the composite level, growth in new work edged down for the second month in a row.
Sustained job creation among service providers largely offset a decline in manufacturing headcounts during February, leaving overall employment little-changed from the previous month.
Companies reported higher input costs during the survey period. Input costs of service providers rose despite inflation easing from January's 69-month record because of rises in the cost of food, fuel, raw materials and salaries.
An optimistic business outlook for the next 12 months strengthened across both manufacturing and service sectors in February, with the highest level of positive sentiment registered in the services sector. Confidence among manufacturers was at an 11-month high, with business expectations at their most positive since June 2017.
