China's services activity expanded in August for the third straight month and reached the highest level in nearly two years, according to an independent survey released Thursday.
The HSBC Purchasing Managers' Index (PMI) for the services sector rose to a seasonally adjusted 60.6 in August from 60.1 in July, according to a survey by Markit Economics on behalf of HSBC.
A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.
"Services sector activities are rebounding strongly, as indicated by a rise in the business activity index to 60.6 – its highest level since September 2007 and evidently higher than the historical average of 58.1," Qu Hongbin, a Hong Kong-based economist for HSBC, said in a statement.
"This implies that China's investment-led recovery is more broad-based, as stimulus measures filter through the other parts of the economy, boosting sentiment and lifting both enterprise and consumer demand for various services."
Beijing announced a four-trillion-yuan (585-billion-dollar) stimulus package last year in a bid to prop up growth in the world's third largest economy by boosting spending on infrastructure and other government-backed projects.
The HSBC Composite Output Index, which combines PMI for manufacturing and services, rose to 59.4 in August from 56.9 in July, signalling overall activity grew at the second-fastest rate since the survey began in November 2005.
The survey of purchasing executives at 400 private sector service companies found employment rose for the seventh straight month to 55.1 in August — the highest level since April 2008 — from 52.6 in July.
"As private enterprises represent a large proportion of the service sector, the more vibrant services activities are not only important to sustain China's growth recovery, but also crucial for job creation, one of the top concerns of policy-makers," said Qu.
The services sector accounts for around 40 percent of China's economy.
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