ACTIVITY in China’s services sector slowed to its lowest in five months in June, a private survey showed Friday, suggesting the economy still needs further policy support despite some signs of steadying.

    The government has rolled out a suite of measures since last year, including interest rate cuts, to prop up growth, but economists worry that persistent weakness in exports and the property sector combined with high local government debt will keep the world’s second-largest economy under pressure.

    The headline HSBC/Markit Purchasing Managers’ Index (PMI) for June fell to 51.8 from 53.5 in May, hitting its lowest since January but still indicating expansion for the 11th straight month.

    A reading above 50 points indicates growth on a monthly basis, while one below that points to contraction.

    The new business sub-component fell to 52.2, an 11-month low, from 54.4 in May, while the employment sub-index fell to its lowest in three months and indicated jobs were being shed.

    “In the services sector, business activity, new orders and employment all expanded at slower rates, while optimism towards the business outlook also moderated,” said Annabel Fiddes, an economist at Markit.

    A similar HSBC/Markit factory survey released Wednesday showed activity contracted for the fourth straight month in June but at a slower pace than in May, fueling hopes that that sector may be slowly bottoming out.

    “The persistently weak performance of manufacturers combined with a slowdown in the service sectors is likely to prompt the authorities to introduce further stimulus measures,” Fiddes said.(SD-Agencies)