Business activity in China's services sector grew at its slowest pace in 21 months in September as the pace of new business cooled, a private survey showed. In contrast, German industrial output posted its biggest monthly rise in more than six years in August, suggesting Europe's biggest economy is firing on all cylinders again and set for solid growth in the third quarter. Ciara Lee reports.
Chinese workers have had a week off and they've spent much of it shopping An official government survey of Golden Week reveals retail sales rose at a double-digit pace. Average daily sales from retailers and catering firms increased 10.3 percent to 1.5 trillion yuan - or 226 billion dollars - during the eight-day break. The news though has been somewhat overshadowed by other economic data. Business activity in China's services sector grew at its slowest pace in 21 months in September And the pace of new business cooled. It's a stark contrast with an official gauge, which showed the services sector expanding at the fastest pace since 2014. And further blurring the picture of how the key part of the Chinese economy is actually performing. The Caixin/Markit services index fell to 50.6 in September - one of the weakest readings since the survey began in 2005. A reading below 50 indicates a contraction. (SOUNDBITE) (English) MARKET ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "The expansion wasn't particularly impressive. But these things take time. You are obviously going to have some hiccups." It was a different story in Germany. Industrial production jumped more than expected in August, posting its biggest monthly gain in more than six years. (SOUNDBITE) (English) MARKET ANALYST AT CMC MARKETS, DAVID MADDEN, SAYING: "It was quite impressive, especially when you actually take into consideration these figures are from August. August was obviously when the euro was continuing its ascension versus the U.S. dollar and the British pound." Europe's biggest economy is set for solid growth in the third quarter Industrial output also increased, up 2.6 percent. And manufacturing output rose by 3.2 percent. Manufacturers of cars and other vehicles were the main driver behind the overall surge. Leading economic institutes have now raised their growth forecast for the German economy to 1.9 percent this year and 2 percent next.