China’s services industry under pressure from ‘enormous’ inflation pressure, weak overseas demand

The Caixin/Markit services purchasing managers’ index (PMI) fell to 55.1 in May, down from 56.3 in April but still well in expansionary territory

The Caixin PMI contrasts with an official survey released earlier this week, which showed activity in China’s services sector expanded at a faster pace in May

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Though slower to recover from the coronavirus than manufacturing, a gradual improvement in consumption has stimulated activity in China’s services sector, which includes many smaller and private companies. Photo: EPA-EFE

Published: 10:22am, 3 Jun 2021Updated: 10:24am, 3 Jun 2021

China’s services sector expansion slowed in May, a private sector survey showed on Thursday, with weaker overseas demand and increased costs putting pressure on businesses.

The Caixin/Markit services purchasing managers’ index (PMI) fell to 55.1 in May, down from 56.3 in April but still well in expansionary territory. The 50-mark separates growth from contraction on a monthly basis.

The survey attributed part of the slowing expansion to a fall in overseas demand as coronavirus cases abroad hurt business activity. A gauge of export orders slipped into contraction.

The Caixin PMI contrasts with an official survey released earlier this week, which showed activity in China’s services sector expanded at a faster pace in May.

Though slower to recover from the pandemic than manufacturing, a gradual improvement in consumption has stimulated activity in China’s services sector, which includes many smaller and private companies.