China’s service industries expanded at a faster pace last month, supporting a further acceleration of growth in the world’s second-biggest economy.
The non-manufacturing Purchasing Managers’ Index rose to 55.6 from 54.5 in February, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today. A separate services gauge from HSBC Holdings Plc and Markit Economics rose to 54.3, matching the highest since May, from 52.1. Readings above 50 signal expansion.
A pickup in industries from banking to transportation would bolster expansion after factory output had the weakest January-February growth since 2009. Premier Li Keqiang, who took office last month, is trying to rely more on domestic demand for growth and less on exports and investment.
“The economy is on track to meet or beat the government’s target,” Dariusz Kowalczyk, senior economist and strategist at Credit Agricole CIB in Hong Kong, said in a note. The official gauge’s level, while “relatively low” by historical standards, is consistent with a “more moderate pace of growth,” Kowalczyk said.
The government last month set a target of 7.5 percent expansion for 2013, the same as 2012’s goal. The March reading of the official services PMI compares with 58.0 in March 2012 and 59.2 in March 2011.
The benchmark Shanghai Composite Index of stocks rose 0.2 percent as of 9:52 a.m. local time following two days of losses.
Economic growth may have accelerated for a second quarter to 8.1 percent in the first three months of this year, according to the median estimate in a Bloomberg News survey last month. Gross domestic product expanded 7.9 percent in the final three months of last year after a 7.4 percent gain in the previous quarter, reversing a seven-quarter slowdown.
The official report “reflects growing momentum” in expansion, Cai Jin, a vice chairman at the federation, said in a statement. A construction index rose to the highest in a year, while a logistics gauge “increased significantly,” Cai said.
The logistics federation’s non-manufacturing index is based on responses from purchasing managers at 1,200 companies in 27 industries including banking, retailing, construction and transportation. A new seasonally adjusted series began in March 2012 and the data were revised back to March 2011.
China’s official Purchasing Managers’ Index for manufacturing rose to an 11-month-high of 50.9 in March, the statistics agency said on April 1. That was below the 51.2 median estimate of analysts surveyed by Bloomberg News. A similar gauge from HSBC and Markit rose to 51.6 from 50.4. Readings above 50 indicate expansion.
Service industries accounted for 45 percent of gross domestic product last year, according to the statistics bureau, up from 41 percent in 2003. The government is seeking to increase the share to 47 percent by 2015. In the U.S., services comprise 90 percent of the economy.
Treasury Wine Estates Ltd., the world’s second-largest wine company, expects China to overtake the U.S. by 2023 as the biggest wine market globally, Chief Executive Officer David Dearie, said in an interview in Beijing on March 22. Dearie said Chinese wine sales will rise to about 500 million cases a year in a decade, from 150 million cases at present.