China’s services sector activity skids in October as coronavirus restrictions ‘linger’ on economy

Caixin services purchasing managers’ index (PMI) fell to 48.4 in October from 49.3 in September

On Monday, the official non-manufacturing PMI, which measures business sentiment in the services and construction sectors, fell to 48.7 in October from 50.6 in September

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China’s Caixin services purchasing managers’ index (PMI) fell to 48.4 in October from 49.3 in September, data released on Thursday showed. Photo: Reuters

Published: 10:01am, 3 Nov 2022

China’s services activity contracted again in October as coronavirus containment measures hit businesses and consumption, overshadowing the economic rebound in the last quarter, a private-sector business survey showed on Thursday.

The Caixin services purchasing managers’ index (PMI) fell to 48.4 last month, the lowest since May, from 49.3 in September as rising virus caseloads led to worsened disruptions and weighed on consumer confidence. The 50-mark separates contraction from expansion on a monthly basis.

An official survey on Monday also showed services activity, which relies more on face-to-face interactions, fell into contraction territory in October from expansion in the month prior.

After better-than-expected growth in the third quarter, China’s economy is again struggling for traction amid persistent antivirus measures, a protracted property sector crisis and mounting global recession risks.

Survey respondents said new business was down for second consecutive month in October despite the week-long National Day holiday earlier in the month.

Tourist trips fell by 18.2 per cent from last year’s holiday season with domestic tourism revenues down 26.2 per cent.