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The pace of growth in China’s services sector softened in January, according to an independent gauge of growth focused on the country’s smaller and private enterprises.
The Caixin-Markit China services purchasing managers’ index fell back to 53.1 in January from 53.4 in December, which had been the highest level above the 50-point line delineating expansion from contraction since July 2015.
That is in contrast with the official services sub-index from Beijing, which concentrates on larger state-owned firms and inched higher to 53.5 last month.
The Caixin gauge indicated both new orders and output increased at a slower pace at service providers in January, as backlogs of work rose at the fastest rate in seven years. Growth in employment picked back up, however, marking a fifth month of modest expansion.
The cost of inputs grew at a quicker overall pace in January. While some companies surveyed reported charging clients more as a result others pointed to greater competition restricting their ability to raise prices. Even so, expectations for the coming 12 months rose to the highest level since February 2016.
The latest reading from the services gauge suggests growth moderated across private-sector companies at the year’s outset, as Caixin’s manufacturing gauge – also focused on smaller, private firms – also pointed to softer growth in January. Its official counterpart, which tracks primarily large, state firms, likewise suggested growth in factory activity had slowed, but less markedly.