Service sector slowing down

Service sectors in China and India lost some momentum and Australian service industries contracted further in July, data released Friday showed, the latest signal of stress in Asia-Pacific economies. The news followed data Wednesday showing a broad deterioration in Asia’s export-dependent manufacturing sector, which has faced heavy pressure from a faltering U.S. recovery and a downturn in the eurzone’s crisis-hit economy. Economists said service sectors in China and India are still robust, despite the slower pace of expansion. But the recent slowing helps build a case for easing steps by policy makers in Asia, especially when combined with the dismal manufacturing figures. China’s official non manufacturing Purchasing Managers’ Index fello 55.6 in July from 56.7 in June, as Chinese government measures toein in property prices took hold.he gauge covers the real estate sector, among others including re-ail, aviation and software. The reading came in lower than some private estimates, and two days after China’s manufacturing PMI fell to 50.1 from 50.2 in June. For both manufacturing and services PMIs, a reading above 50 indicates that the sector is expanding while below 50 shows contraction. “China’s economic situation haseached a stalemate. No significant improvements were seen in July,” said Citi economist Ding Shuang. A separate PMI measure of China’s services sector compiled by HSBC rose to 53.1 from 52.3 in June. HSBC co-head of Asian economic research Frederic Neumann said the Chinese services PMI data show China’s economy is stabilizing, and are much less worrying than the lackluster manufacturing data. The official 55.6 reading shows the economy is still expanding at a healthy pace, but underlines that Beijing should continue to support it, including with measures to spur construction, given the bleak external picture, he said. India’s service-sector PMI posted54.2 reading in July, down slightly from 54.3 in June, according to HSBC’s PMI survey. New orders at services and manufacturing companies in India continued to rise, but the pace of increase slowed and the new-orders index was the lowest since November 2011. India’s inflation rate remained strong on solid demand and risingages, HSBC said. “With inflation risks still lingering despite the slowdown and policy action out of Delhi so far insufficient, the RBI has littleoom to maneuver,” said Leif Eskesen, HSBC chief economist for India and Southeast Asia. In Australia, the Australian Industry Group-Commonwealth Bankerformance of Services Index fello 46.5 in July from 48.8 in June.he parts of the country’s economy not directly tied to its booming mining sector continue to struggle, as a strong Australian dollar continueso take its toll, Mr. Neumann said.