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
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.
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.
Firms’ input prices rose for the 18th month in a row, but at a slower pace, the survey showed.
A subindex for employment rose at the fastest pace since May, and a gauge of new business accelerated.
surveyed enterprises were concerned about the disruptions caused by scattered Covid-19 flare-ups
“Supply and demand both improved. As new products helped lift the market sentiment, business activity and total new business both expanded for the fourth consecutive month. But surveyed enterprises were concerned about the disruptions caused by scattered Covid-19 flare-ups,” said Wang Zhe, senior economist at Caixin Insight Group.
“Although the measure for business expectations remained in positive territory, it fell to the lowest since September 2020 and was remarkably lower than the long-term average.”
Caixin’s December composite PMI, which includes both manufacturing and services activity, rose to 53.0 from 51.2 the previous month.
