China’s services sector activity growth accelerates, but Covid-19 flare-ups weigh on outlook

Caixin/Markit services purchasing managers’ index (PMI) rose to 53.1 in December from 52.1 in November

China’s official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, rose to 52.7 from 52.3 in November

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China’s Caixin/Markit services purchasing managers’ index (PMI) rose to 53.1 in December from 52.1 in November. Photo: Xinhua

Published: 9:56am, 6 Jan 2022Updated: 10:28am, 6 Jan 2022

Activity in China’s services sector expanded at a faster pace in December amid higher demand and easing inflationary pressure, but continuing small-scale coronavirus outbreaks weighed on the outlook, a private sector survey showed on Thursday.

The Caixin/Markit services purchasing managers’ index (PMI) rose to 53.1 in December from 52.1 in November, remaining above the 50-point mark that separates growth from contraction on a monthly basis.

The survey, which focuses more on small firms in coastal regions, tallied with those of an official survey, which also showed the expansion in the services sector sped up.

Analysts said the services sector, which has been slower to recover from the pandemic than manufacturing, is more vulnerable to sporadic outbreaks and antivirus measures, with leisure and tourism businesses hurt the most.

Most of China’s recent local cases have been in the northwestern province of Shaanxi, where the capital city Xian has been on lockdown to control the spread of the disease.