The Chinese private sector activity expanded at a slower pace in May as the service sector growth slowed from April and manufacturing output declined, survey data from Markit showed Friday.
The Caixin composite output index came in at 50.5 in May, down from April's 50.8, signaling the weakest pace of expansion in the current three-month sequence of growth.
Similarly, the service sector PMI dropped to 51.2 in May from 51.8 in the previous month. A reading above 50 indicates expansion in the sector.
At composite level, new business rose only marginally in May. New business placed at service providers climbed at a weaker pace, while new orders at goods producers declined for the first time in three months.
Although marginal, service sector employment increased for the second month. Meanwhile, further steep job cuts were reported by manufacturers.
Cost pressures eased across both the manufacturing and service sectors in May. The report also showed that both monitored sectors raised their output charges, with a number of companies increasing their prices due to higher cost burdens.
The 12-month business outlook index dipped to the lowest level in 2016 so far in May.
"The government needs to continue to push forward stabilizing measures to help the economy recover," Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group, said.
"It should also relax the control and regulation of the services sector to enable it to realize its growth potential and to facilitate the transformation and healthy development of the economy."
by RTT Staff Writer
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