China’s service activity slowed slightly in August, remained second-fastest since May 2021 – private survey
DATA MACRO
China’s service activity slowed slightly in August, remained second-fastest since May 2021 – private survey
DATA MACRO

China’s service activity slowed slightly in August, remained second-fastest since May 2021 – private survey

 

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Activity in China’s service sector expanded at slightly slower pace in August, but still the second-fastest pace since May 2021, according to the findings of a widely watched private survey.

The Caixin purchasing managers’ index for services stood at 55 in August, a dip of 0.5 percentage point from July, but remaining in expansionary territory as customer demand rebounds as restrictions imposed to curb a spate of Covid-19 outbreaks are relaxed.

The reading came after the official service PMI released by the National Bureau of Statistics released earlier this months dropped 0.9 percentage point to 51.9.

In August, the sub-index tracking input prices in the service sector hit the highest in four months, as labor, raw materials, food and marketing expenses jumped, according to the survey. Service fees, though, have only risen slightly to moderate the impact of the pandemic and to boost business.

Last month’s power shortage caused by the heatwave greatly affected manufacturing output, but had little impact on the service sector, said Wang Zhe, senior economist at Caixin Insight Group.

The economy is still stabilizing after the Covid-19 flare-ups in the first half but the foundation for economic recovery is not sound with a lot of downward pressure, Wang said. Employment is still the focus of attention, he added.

The Caixin manufacturing PMI released earlier dipped below the 50 mark to return to contractionary territory at 49.5 as Covid-19 outbreaks and an intense heatwave hampered production. As a result, the Caixin composite PMI, which tracks both manufacturing and service activities, slid by 1 percentage point from July to 53, falling for the second straight month.

The reading were slightly divergent from the results of the official survey conducted by the National Bureau of Statistics in which the manufacturing PMI picked up by 0.4 percentage point to 49.4, though remaining in the contractionary territory and the official composite PMI fell 0.8 percentage point to 51.7.