China's services activity rose at its slowest pace in five months in November, as growth in new orders softened despite a boost from international demand, according to a private poll issued on Wednesday.
The RatingDog China General Services PMI, compiled by S&P Global, dropped to 52.1 from 52.6 in October, indicating the smallest expansion since June. Growth and contraction are distinguished by the 50-mark.
The government's official services PMI, which dropped from 50.2 in October to 49.5 on Sunday, is generally consistent with the poll.
The RatingDog index is seen as a better indication of smaller, export-oriented service providers along China's east coast, while the official PMI mostly covers large and medium-sized industries, including state-owned corporations.
Momentum in the world's second-largest economy has stalled this year, with third quarter GDP growth dropping to its worst pace in a year.
Although they haven't yet introduced fresh, significant stimulus to promote consumption, Chinese authorities have hinted at a more aggressive turn in this direction over the next five years.
The survey showed the new orders index climbed at the slowest pace in five months, but new export business returned to expansion after falling in October, a reversal ascribed to reduced uncertainty around U.S.-China trade hostilities.
"While a recovery in external demand provided marginal support this month (November), the contraction in employment, pressure on profit margins, and weakening expectations remain the main constraints facing the sector," Yao Yu, founder of RatingDog, stated.
November saw a fourth consecutive month of declining employment in the services sector, which resulted in an increase in unfinished work following a decrease the month before.
Average input costs continued to climb, but at a slower pace, driven by expenses for raw materials, office supplies, and petrol.
To counteract these cost constraints, some enterprises partially passed on the increases to customers, resulting in a modest rise in output charges.
Last month, business confidence in the industry increased once more, but at the slowest rate since April. The Composite Output Index, which combines manufacturing and services performance, came in at 51.2 in November, down from 51.8 in October.
