The growth of China's service sector eased for a second consecutive month in July but activities continued to expand, a survey showed Wednesday.
The HSBC Business Activity Index, a seasonally adjusted gauge of the service sector across the country, posted 53.5 last month, down from June's 54.1 and May's 54.3. A reading above 50 means growth, and a drop if it falls below that figure.
By comparison, the HSBC Purchasing Managers' Index, a composite indicator of operating conditions in the manufacturing sector, dropped to 49.3 in July from June's 50.1. It was the first time in a year that the index fell below 50.
"The growth in service sector activities moderated in July due to monetary tightening and property cooling measures," said Qu Hongbin, chief economist for China at HSBC. "Despite the slowdown, the service sector continued to expand steadily on resilient consumer consumption."
The survey also revealed inflationary pressure eased as the component index of average input costs moved at the slowest pace in five months.
But growing competition for new business forced service providers to raise their expenses only fractionally so that output cost inflation grew at a one-year low.
