According to the China March HSBC Services PMI,or Purchasing Managers Index,business confidence hit an 11-month high.The survey registered a 53.3,which is slightly less than February's 53.9 reading;but a mark of greater than 50 still indicates growth in service-oriented businesses.New business expanded for the fortieth straight month.
Compiled by British financial data expert Markit for HSBC bank,the index showed firmer client demand;improved overall business conditions;and service firms being able to pass rising costs onto consumers.
Qu Hangbin,HSBC Chief China Economist,nonetheless thinks overall growth is slowing a bit-for instance,in export orders;industrial production;or employment.All these call for further easing measures,while inflationary pressures should remain relatively contained in the coming months.
Caution with regard to the March report is justified in that service sector growth was offset by manufacturing weakness and affected by state policies to cool growth in the real estate market.Indeed,service sector companies raised their staffing at only a fractional rate in March;and outstanding business,or backlogs,also rose marginally.
As well,despite the 11-month high in business confidence,the degree of optimism was weaker than the long-run trend for the survey.
All the same,survey respondents were expressing optimism,saying they would expand their companies and expected growth in the wider Chinese economy.China's official growth estimate for 2012 is 7.5%,an outstanding rate in comparison to the developed nations.
HSBC Holdings PLC(HBC)