China services sector growth steadies in July

China’s services sector expanded slightly in July, an HSBC survey showed, indicating that growth in the sector had steadied.

The HSBC non-manufacturing Purchasing Managers’ Index (PMI) stood at 51.3, unchanged from June. A reading above 50 indicates an expansion.

The services sector accounts for nearly 43% of China’s overall economy.

The data come amid concerns that China’s economic growth rate may slow further in the coming months.

The world’s second-largest economy has seen its pace of growth slow for two quarters in a row.

“China’s service sector has stabilised at a relatively low level of growth,” said Qu Hongbin, an economist at HSBC.

HSBC said that new business orders recovered from a 20-month low, but warned that profit margins in the sector continue to be squeezed.

“Without a sustained improvement in demand, services growth is likely to remain lacklustre, putting downside pressures to employment growth.”

A similar official survey released over the weekend showed growth in China’s non-manufacturing sector quickened in July.

The government’s non-manufacturing PMI rose to 54.1 last month from 53.9 in June, the National Bureau of Statistics said.