The services sector in China expanded in January at its weakest pace since August 2011 after companies achieved a smaller volume of new business, a private survey has revealed. The new data adds to mounting indications of easing in the world's second-largest economy.
The HSBC/Markit Services Purchasing Managers' Index (PMI) dropped to 50.7 in January, a low last seen two and half years ago. However, the findings are above the 50-point level that separates growth and contraction. The PMI in December was 50.9.
Slower growth in the services sector stemmed from a cooldown of activity at factories and China's attempts at limiting excessive state spending.
The index is the last of China's four monthly PMI releases, and all have pointed to economic growth quieting in January on easing demand.
The PMI on Friday revealed that new business growth hit its lowest point in seven months, and that could keep alive economists' debate over whether the flimsy demand in January was caused, for the most part, by the Jan. 31 start of Lunar New Year celebrations, especially considering many businesses shut down early for them.