China’s services activities grew fastest since Apr 2021 amid easing Covid controls, shows private survey
China’s services activities grew fastest since Apr 2021 amid easing Covid controls, shows private survey

China’s services activities grew fastest since Apr 2021 amid easing Covid controls, shows private survey

 

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The Caixin services purchasing managers’ index (PMI) rose to 55.5 in July, the fastest growth since April 2021, improving further from a reading of 54.5 in the previous month.

The 50-point mark separates growth from contraction on a monthly basis.

A sub-index for new business in the services sector hit the highest in nine months, bolstered by improved domestic demand, but new export business contracted for the seventh successive month, the survey showed. The rate of cost inflation in the services sector picked up for the first time since March as prices for food, fuel, raw materials and staff remained high.

Due to improving epidemic situation and easing Covid restrictions, services activities which had suffered biggest impacts from the epidemic than the manufacturing sector recovered further in July, said Wang Zhe, senior economist at Caixin Insight Group.

Supply and demand improved continuously, though supply continued to be strong than demand; employment contacted significantly; and companies’ cost increased steadily while product and services prices were largely stable, bringing challenges to companies’ profits, said Wang.

The Caixin Composite PMI, which covers both manufacturing and services sectors, comes in at 54 for July, falling by 1.3 percentage points from June, indicating Chinese companies’ production and business activities expanded at a slower pace.

Earlier data had shown that Caixin manufacturing PMI for July was 50.4, falling by 1.3 percentage points from the previous month.