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China’s services activity falls at second sharpest rate on record as coronavirus curbs ‘hit hard’
- Caixin/Markit services purchasing managers’ index (PMI) fell to 36.2 in April from 42 in March
- Last week, the official non-manufacturing PMI fell to 41.9 in April from 48.4 in March
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China’s services sector activity contracted at the second-steepest rate on record in April, as coronavirus curbs halted the industry, leading to sharper reductions in new business and employment, a private-sector survey showed on Thursday.
The Caixin services purchasing managers’ index (PMI) stood at 36.2 in April, the second-lowest since the survey begun in November 2005 and down from 42 in March.
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The index hit a record low of 26.5 in February 2020 during the onset of the pandemic.
The 50-point mark separates growth from contraction on a monthly basis.
“The new round of Covid-19 outbreaks hit the service sector hard,” said Wang Zhe, senior economist at Caixin Insight Group.
“Demand was under pressure, external demand deteriorated, supply shrank, supply chains were disrupted, delivery times were prolonged, backlogs of work grew, workers found it difficult to return to their jobs, inflationary pressures lingered, and market confidence remained below the long-term average.”
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The pessimistic findings from the survey, which focuses more on small firms in coastal regions, are in line with the government’s official PMI, pointing to the fast deterioration in a key sector that accounts for about 60 per cent of the economy and half of the urban jobs.
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