Investing.com-- China’s services sector grew less than expected in November, private purchasing managers index data showed on Wednesday, as recent stimulus measures offered only limited support to
The Caixin services PMI read 51.5 in November, compared to expectations for a print of 52.5. The reading weakened from the 52.0 seen in the prior month.
The PMI data indicated that while recent stimulus measures did underpin business activity, Beijing likely needed to do more to support local demand. Export orders were a key boost for the services sector in November, while local demand weakened.
Wednesday’s reading comes after Beijing enacted a slew of aggressive stimulus measures since late-September, all aimed at shoring up economic growth. Recent PMI data showed the manufacturing sector was benefiting from these measures, with the sector expanding for two consecutive months.
But whether the economic recovery will sustain still remains uncertain, especially as China faces increased trade headwinds from potential U.S. tariffs.
“The downward pressure facing the economy remains prominent, marked by continued contraction of employment. This indicates that the effect of economic stimulus is yet to be felt in the labor market and businesses’ confidence in expanding workforce needs to be strengthened,” Wang Zhe, Senior Economist at Caixin Insight Group wrote in a note.
President-elect Donald Trump threatened to impose steep import tariffs against the country when he takes office on January 20- a scenario that could herald more economic pressure.
Beijing is expected to roll out more targeted, fiscal stimulus in response to Trump’s tariffs. Two key Chinese political meetings are set to take place in December, potentially offering up more cues on stimulus.