Chinas service sector indicator slightly declines

HONG KONG -- China's service sector indicator for January marginally declined due to weak results in the construction and real estate market, an industry group said Friday.

The Purchasing Managers Index (PMI) of China's non-manufacturing sector came in at 56.4 in January, down from 56.5 from a month earlier, according to the China Federation of Logistics and Purchasing (CFLP).

The PMI is an indicator that measures the economic health of a country's non-manufacturing sector, which accounts for less than 45 percent of China's economy. A PMI of more than 50 represents expansion of the sector compared to the previous month. A reading lower than 50 represents a contraction, while a reading at 50 indicates no change.

The index has been above 50 for 11 consecutive months, indicating an overall stable growth in the non-manufacturing sector, the federation said.

"We believe that overall non-manufacturing activities in January remained stable and maintain an optimistic view on the market" the CFLP said in a statement.

The federation said that the construction industry dropped significantly, attributing to low seasonal demand ahead of the Lunar New Year's holiday.

The construction business activity index stood at 40.3, down from 60.7 in the previous month, while the new orders index was 38.3, down from 52.4 in December.

The real estate market retreated in January, with its business activity index falling 5.6 points on-month to 44.7, and its new orders index fell by 3 points to reach 42 last month.

However, the Chinese economy still faces greater inflationary pressures, as the price index for non-manufacturing intermediate input remained high at above 60 percent, according to the CFLP. (Yonhap)