China January Non-Manufacturing PMI Falls to 53.4, Indicating The Nation's Services Sector Slowed To A 5-Year Low

China’s non-manufacturing purchasing managers index (PMI) fell 1.2 points to 53.4 in January from 54.6 in December.

The drop indicates that China's service sector slowed to a five-year low in January, and further highlights stuttering momentum in the world's second-largest economy, which could enhance investors' worries about emerging markets.

Even though Monday's reading was the lowest since December 2008, it was still higher than the 50 point level that indicates growth. A reading above 50 indicates expansion; a reading below 50 reveals contraction.

The non-manufacturing PMI is based a survey released by the Beijing-based National Bureau of Statistics and Federation of Logistics and Purchasing in January. The data compiled from monthly replies to questionnaires sent to purchasing executives of 1,200 companies in 27 non-manufacturing industries, including construction, transport and telecommunications.

The business activity index for leasing, commercial services, hotels, postal services, marine transportation, real estate and public utilities dropped below the 50 threshold, with business volume falling.

The index of new orders dipped 0.1 point to 50.9. The services orders index slowed to 0.1 point as well, to 49.6.

New orders for industries like real estate, hotels, leasing and restaurants declined, signaling demand slowed down. But the business activity index for air and railway transportation and retail remained above 60, with business volume growing quickly, the NBS said. The construction industry posted a business activity index of 61, a 1.6 point decrease month on month.

The non-manufacturing figure arrived after news of a decline in last month's manufacturing PMI to a six-month low of 50.5 from 51 in December.