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China’s services sector ‘significantly affected’ as activity contracted at steepest pace in 2 years in March
- Caixin/Markit services purchasing managers’ index (PMI) fell to 42 in March from 50.2 in February
- Last week, the official non-manufacturing PMI fell to 48.4 in March from 51.6 in February
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Activity in China’s services sector contracted at the steepest pace in two years in March as the local surge in coronavirus cases restricted mobility and weighed on client demand, a private sector survey showed on Wednesday.
The Caixin services purchasing managers’ index (PMI) dived to 42 in March from 50.2 in February, dropping below the 50-point mark that separates growth from contraction on a monthly basis. The reading indicates the sharpest activity decline since the initial onset of the pandemic in February 2020.
The survey, which focuses more on small firms in coastal regions, tallied with the gauge of an official survey, which also showed the deterioration in the services sector.
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Analysts say contact-intensive services sectors such as transport, hotel and catering were hurt the most, clouding the outlook for a much anticipated rebound in consumption this year.
Firms’ input prices rose in March after easing to a six-month low in February.
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The virus outbreaks and softer demand reduced firms’ appetite for additional staff, with the employment subindex showing continued contraction in activity albeit at a slower pace.
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