Services activity in China, Japan and India rose moderately in December, according to PMI (purchasing managers' index) survey data published Tuesday.
Chinese service providers saw a further solid rise in new business volumes during December, with the rate of growth down only slightly from November’s two-and-a-half year peak. Panellists suggested that a combination of promotional activities and increased market activity helped to boost new workloads. In contrast, manufacturers saw a renewed decline in total new orders placed at their units, albeit only marginal. Consequently, composite new business increased at a modest pace that was the slowest since May.
Hongbin Qu, chief economist, China & co-head of Asian Economic Research at HSBC said: “The headline HSBC China Services PMI rose to 53.4 in December, up from 53.0 in November. The solid performance was supported by another strong expansion in new business. The employment index improved modestly and price pressures remain muted.
The services sector continued to hold up well amidst the manufacturing downturn, providing some counter-weight to the downward pressures on the economy. We continue to believe that there is insufficient demand in the overall economy and more easing measures are warranted in the coming months.”
Business activity at Japanese services firms remained in growth territory in December, despite subdued demand conditions signalled by a decline in new orders. Employment growth, meanwhile, slowed to the weakest in the current period of expansion.
Upward pressure on input prices rose further, stemming from the deprecation of the yen, while charges increased slightly.
The headline seasonally adjusted Business Activity Index at 51.7 in December, up from 50.6in November and signalling a moderate rise inactivity at Japanese services firms. Growth in business activity has now risen for the second consecutive month, with the latest index reading posting well above the average since the sales tax increase was implemented in April.
At 51.1, down from 52.6, the seasonally adjusted HSBC India Services PMI Business Activity Index – a single question tracking changes in activity at Indian services companies on a month-by-month basis – was indicative of a moderate expansion in business activity in December.
Despite slowing since November, the rise remained stronger than the average observed for 2014. Anecdotal evidence linked rises in service sector output to improvements in demand. ‘Other Services’ was the best performing of the six monitored sub-sectors, while the sharpest contraction occurred in Financial Intermediation.
The overall slowdown in activity growth was mirrored by a weaker expansion in India's service sector new business in December.
The latest increase was the eighth in as many months and moderate overall. Across the private sector as a whole, growth of new work inflows remained solid, led by a further acceleration at manufacturers.