China’s services sector bounces back, offering support to slowing economy

Caixin/Markit services purchasing managers’ index (PMI) rose to 53.4 from 46.7 in August, pulling away from the lowest level seen since the height of the coronavirus

The better readings in the survey, which focuses more on smaller firms in coastal regions, are in line with findings in an official survey last week

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Analysts say the services sector, which was slower to recover from the pandemic than manufacturing, is more vulnerable to sporadic virus outbreaks in the country, clouding the outlook for the much anticipated rebound in consumption in the months to come. Photo: Reuters

Published: 10:03am, 8 Oct 2021Updated: 10:15am, 8 Oct 2021

Activity in China’s services sector returned to growth in September as a major coronavirus outbreak in the eastern province of Jiangsu receded, a private-sector survey showed on Friday, offering some support to a slowing economy.

The Caixin/Markit services purchasing managers’ index (PMI) rose to 53.4 from 46.7 in August, pulling away from the lowest level seen since the height of the pandemic last year. The 50-point mark separates growth from contraction on a monthly basis.

The better readings in the survey, which focuses more on smaller firms in coastal regions, are in line with findings in an official survey last week which also showed the services industry returned to activity growth.

Analysts say the services sector, which was slower to recover from the pandemic than manufacturing, is more vulnerable to sporadic virus outbreaks in the country, clouding the outlook for the much anticipated rebound in consumption in the months to come.

“In view of this, in the coming months, the government should focus on improving epidemic prevention and control and alleviating supply-side pressure,” said Wang Zhe, senior economist at Caixin Insight Group.