China’s services sector activity growth speeds up in July, but Delta variant risks loom
- Caixin/Markit services purchasing managers’ index (PMI) rose to 54.9 in July from 50.3 in June
- China’s official services gauge had also shown a slowdown in July, though it remained well in expansion territory
Growth in China’s services sector accelerated in July, a private survey showed on Wednesday, although the spread of the Delta variant across the country threatens to undercut the recovery in the world’s second-biggest economy.
China’s services sector has been slower to recover from the coronavirus pandemic than manufacturing, but has been helped by a gradual improvement in consumption in recent months. A rise in domestic coronavirus infections, however, is threatening to hurt the economy’s steady recovery.
The economy still faces enormous downward pressure, and we need to ensure business owners remain confident
The July readings were buoyed by the successful containment of coronavirus cases in southern China, said Wang Zhe, senior economist at Caixin Insight Group, although he warned that the impact from the latest round of outbreaks since late July was likely to hurt August’s PMI readings.