China’s services sector expanded at slower pace in July, weighed down by falling export orders and job losses
- The Caixin/Markit services purchasing managers’ index (PMI), which focuses on smaller, private firms, fell to 54.1 in July from 58.4 in June
- Growth rates of new business and activity remained strong, while sentiment for the upcoming 12 months was the highest recorded since March 2015
China’s services sector activity continued to grow in July, but the pace slowed from a decade high the previous month as export orders remained weak and firms continued to shed workers, a private survey showed on Wednesday.
But despite the drop, the index remained in positive territory, as growth rates of new business and activity remained strong amid the recovery from the impact of the coronavirus. Confidence surrounding future activity also continued to strengthen, with sentiment for the upcoming 12 months the highest recorded since March 2015.
“The Caixin China general services business activity index came in at 54.1 in July, down from a 10-year high of 58.4 the previous month. It remained in expansionary territory, pointing to a continued rapid recovery of the services sector as the domestic Covid-19 epidemic has largely been brought under control,” said Wang Zhe, senior economist at Caixin Insight Group.
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What is the purchasing managers' index (PMI)?
In the construction sector of the official non-manufacturing PMI, sentiment rose to 60.5 from 59.8 in June, sparked by a building boom, while services morale edged down slightly to 53.1 from 53.4.