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China services activity contracts for third straight month in May as coronavirus ‘still weighs heavy’
- Caixin/Markit services purchasing managers’ index (PMI) rose to 41.1 in May from 36.2 in April
- Last week, the official non-manufacturing PMI rose to 47.8 from 41.9 in April
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China’s services activity contracted for a third straight month in May, pointing to a slow recovery ahead despite the easing of some coronavirus lockdowns in Shanghai and neighbouring cities, a private business survey showed on Monday.
The Caixin services purchasing managers’ index (PMI) rose to 41.4 in May from 36.2 in April, edging up slightly as authorities began to roll back some of the strict restrictions that have paralysed the financial city of Shanghai and roiled global supply chains.
However, the reading remained well below the 50-point mark that separates growth from contraction on a monthly basis.
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Analysts say weakness in the services sector, which accounts for about 60 per cent of China’s economy and half of urban jobs, is likely to persist under the government’s zero-Covid policy, with contact-intensive sectors such as hotels and restaurants bearing the brunt of the fallout.
An official survey on Tuesday also showed the services sector was still mired in contraction.
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