Softer service sector weighs on economy

The index for new orders in the non-manufacturing sector rose to 50.9 in August from 50.3 in July, but the export sub-index sank to 49.6, compared with 53.1 in July, showing continued weakness in overseas demand. Xie Zhengyi / For China Daily

Non-manufacturing business activity moderated in China last month, with the Purchasing Managers' Index coming in at 53.9, down from 54.1 in July, official data showed on Tuesday.

The overall figure was depressed by a softer service sector, where the PMI slid to 52.5 from 53, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

Conditions in the construction industry improved last month, as shown by a PMI that rose to 59.5 from 58.5.

Despite the overall weakening last month, the official PMI has stayed above the 50-threshold since November 2011. A reading above 50 means expansion .

Cai Jin, vice-chairman of the CFLP, said that the non-manufacturing economy is "stable and sound", as demonstrated by the PMI.

An increase in new orders in August indicates support for non-manufacturing activity in the coming months, Cai said, and there's been an obvious improvement in employment conditions.

Conditions for smaller companies have brightened as well, Cai said.

The index for new orders in the non-manufacturing sector rose to 50.9 from 50.3 in July.

However, the exports sub-index sank to 49.6, compared with 53.1 in July, showing continued weakness in overseas demand, the NBS said.