2011-03-04 09:57

BEIJING - China's non-manufacturing industries contracted in February for the first time in a year because of the week-long Lunar New Year holiday.

The Non-Manufacturing Purchasing Managers' Index (PMI) dropped to 44.1 from 56.4 in January, the China Federation of Logistics and Purchasing said on its website on Thursday, falling below the 50 level that divides expansion and contraction.

"The pullback is mainly due to seasonal factors," Cai Jin, vice-president of the logistics federation, said in a statement. "Excluding that, the momentum of the indicator is still running at its normal trend." The gauge published by the federation also dropped below 50 in February last year.

A separate PMI for services industries published Thursday by HSBC Holdings Plc and Markit Economics declined to 51.9 in February from 52 the previous month, after seasonal adjustment.

"The slowdown in China's service sector continued in February with activity-growth easing to the third-lowest in the history of the series," HSBC said. "This primarily reflected a further moderation in new business growth."

In a survey released by the logistics federation and the National Bureau of Statistics, the sub-index for consumption-related businesses dropped to 46.5 in February from 62.6 the previous month. The gauge for new property orders declined to 39.7 in February from 42 in January, the fifth monthly decline, the federation said.

Still, the index for business prospects climbed to 68.7 from 68.1 the previous month, indicating companies are "optimistic" about the business outlook, the federation said.

Chinese service providers surveyed by HSBC were "confident" about the one-year business outlook, with expectations of further gains in new business and company expansion policies underpinning respondents' positive sentiment.

Bloomberg News