China’s services activity ‘plunges’ after coronavirus flare-ups

Caixin/Markit services purchasing managers’ index (PMI) fell to 46.7 in August from 54.9 in July

Earlier this week, China’s official non-manufacturing purchasing managers’ index (PMI) fell to 47.5 in August

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China’s Caixin/Markit services purchasing managers’ index (PMI) fell to 46.7 in August from 54.9 in July, data released on Friday showed. Photo: Xinhua

Published: 10:16am, 3 Sep 2021Updated: 11:05pm, 3 Sep 2021

Activity in China’s services sector “plunged” in August due to a series of coronavirus outbreaks, a private survey showed on Friday, matching the findings in the official data released earlier this week.

The Caixin/Markit services purchasing managers’ index (PMI) – a gauge of sentiment among smaller, private firms – fell to 46.7 in August from 54.9 in July. It was the first time that services activity shrank since April 2020.

The result was well below expectations by analysts polled by Bloomberg, who had forecast that the index would fall to just 52. A reading above 50 indicates growth in sector activity, while a reading below the mark represents contraction. The lower the reading is below 50, the faster the pace of contraction.

Wang Zhe, senior economist at Caixin Insight Group, said the drop reflected the “disruptions caused by the Covid-19 flare-ups that appeared in parts of China starting in late July”.

Earlier this week, China’s official non-manufacturing PMI – which measures morale in the services and construction sectors among larger state-owned firms – also fell to 47.5 in August from 53.3 in July.

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