China’s services activity expands at slowest rate in 6 months under coronavirus lockdown pressure

Caixin/Markit services purchasing managers’ index (PMI) fell to 50.2 in February from 51.4 in January

It differed from the result of the official non-manufacturing PMI which rose to 51.6 from 51.1 in January

Reading Time:2 minutes

China’s Caixin/Markit services purchasing managers’ index (PMI) fell to 50.2 in February from 51.4 in January, data released on Thursday showed. Photo: Bloomberg

Published: 10:00am, 3 Mar 2022Updated: 10:06am, 3 Mar 2022

Activity in China’s services sector in February expanded at the slowest pace in six months, as the sprawling industry reels from the government’s tough containment measures to stop the spread of local coronavirus outbreaks, a survey showed on Thursday.

The Caixin/Markit services purchasing managers’ index (PMI) dropped to 50.2 in February – the lowest since slowing to 46.7 August and only a touch above the 50-point mark that separates growth from contraction on a monthly basis – from 51.4 in January.

The softer reading contrasted with a slight pickup in the services sector growth in an official survey on Monday, although both results pointed to a still soft expansion as the industry remains vulnerable to disruptions amid China’s zero-Covid approach.

More Chinese cities are battling local coronavirus cases in recent weeks, with infections from the city of Hong Kong surging, although the total number of cases pales in comparison with those in other countries.

A subindex for new business in the private survey stood at 48.8 in February, the first decline since August last year, as services firms reported measures to contain coronavirus cases, including the travel restrictions, impacted client demand.

New export business fell for the second straight month, although at a slower pace.