CHINA’S non-manufacturing sector picked up pace in January, an encouraging sign for the government’s push for a services-driven economy.

The non-manufacturing purchasing managers’ index (PMI) came in at 55.3 this month, up from 55 in December and 54.6 in the same period last year, the National Bureau of Statistics (NBS) said in a statement yesterday.

A reading above 50 indicates expansion, while a reading below reflects contraction. The index has been on a gaining streak for three months, NBS senior statistician Zhao Qinghe said.

The service sector, which accounted for more than half of the country’s GDP, reported stronger expansion as its business activity index rose to 54.4 from 53.4 a month ago, well above the boom-bust line of 50.

Retail, aviation, telecom, information technology, banking and other commercial services were robust, while hotels, catering and property sectors were still in the contraction territory, Zhao said.

“Market demand kept improving and the business outlook became better,” he added.

Meanwhile, the construction sector slowed mildly with its index down to 60.5 as falling temperatures and continued snowfall impeded building projects.

Growth in China’s manufacturing sector slowed more than expected in January to an 8-month low in the face of a cooling property market and tighter pollution rules that have curtailed factory output.

The manufacturing purchasing managers’ index came in at 51.3 this month, decelerating from 51.6 in December, according to data from the NBS. The manufacturing PMI has stayed above the boom-bust line for 18 straight months.

Despite the slowdown, the index was the same with that of a year ago, suggesting the sector remained steady, Zhao said.

Sub-indices for production and new orders went down slightly to 53.5 and 52.6, respectively, while sub-indices on raw material stock, employees and suppliers’ delivery time were still lower than 50.

In face of lingering downward pressure, China is counting on rapidly-growing services to drive the economy and has rolled out a string of favorable measures.

This is the first time that China’s statistics authority has published a general PMI covering both the manufacturing and the service sectors.

Business activity in the two sectors was previously tracked by two separate indices published monthly, which the NBS said lacks a way to reflect overall changes in the economy.

“While old indices will remain, the new gauge will provide a new perspective to monitor the macro economy, and enrich and improve the current PMI system,” the NBS said, adding that it has undertaken more than two years of research and testing.

The NBS said the general PMI better synchronizes with the country’s GDP movement, and is comparable from country to country. (Xinhua)