"Chinese manufacturers and service providers both managed only modest increases in output at the end of the first quarter"
- Annabel Fiddes, economist at Markit
Business activity in China's services sector grew in March even as growth in employment and new business retreated to the lowest level in at least eight months. The HSBC China Services Purchasing Managers' Index climbed to 52.3 in March up from 52.0 a month earlier. The employment sub-index dropped to 51.1, its lowest level in 10 months, whereas optimism towards the 12-month outlook improved marginally in the sector at the end of the first quarter. The degree of upbeat mood among China's services providers rose to the second-strongest in six months. China's services sector, which accounted for 48.2% of the Chinese economy in 2014 and considered to be a pillar of its employment market, has been growing at a faster rate than the nation's manufacturing sector. Nevertheless, service firms are seen facing difficulties this year amid a cooling property market and slower economic growth. China's economic growth is predicted to fall to around 7% this year, the worst in a quarter of a century.
Earlier in the week official data showed growth in China's services sector eased slightly in March and hovered near one-year lows. The official non-manufacturing purchasing manager's index declined to 53.7 from February's 53.9, according to the China Federation of Logistics and Purchasing.
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