03.11.201405:26:40UTC+00Services industry for China follows manufacturing with decline

A measure of the services industry in China declined to the lowest in nine months, suggesting a broad slowdown in the country’s economy after manufacturing similarly fell.

The government’s official reading of a non-manufacturing purchasing managers’ index dropped to 53.8 in October to worsen from the previous month’s 54. Data for the manufacturing sector was released on November 1st and likewise showed a fall from September’s 51.1 to last month’s 50.8 to inch closer to the 50 level that separates growth from contraction. Both reports were released by Beijing’s National Bureau of Statistics and the China FEderation of Logistics and Purchasing.

The declining conditions are seen to be a test of the Chinese government’s stand to stay away from introducing additional stimulus even as the country approaches its weakest economic growth in over two decades. In the third quarter, China’s economy grew by the lowest in five years at 7.3%.

Economist Hua Changchun from Hong Kong’s Nomura Holdings Inc. says that, “The momentum looks weak” amidst the reduced effectiveness of the previous economic measures implemented by the government.

HSBC Holdings Plc and Markit Economics’ separate PMI showed that it was at 50.4 in October, a slight improvement from September 50.2.