Service sector

China’s service sector contracts sharply following containment measures

China’s services sector contracted sharply in April as the introduction of stricter COVID-19 containment measures led to faster reductions in activity and new orders, the results of a survey showed on Thursday. S&P Global survey.

The Caixin Services Purchasing Managers Index fell to 36.2 in April from 42.0 in March. A score below 50.0 indicates contraction.

The rate of reduced activity was the second largest seen in the history of the survey, with companies frequently linking the fall to tighter COVID-19 restrictions and subsequent disruption to operations.

The survey showed that new Business fell at the second highest rate on record and new export orders fell at the fastest rate in two years.

Despite lower business activity and weaker demand, expectations for future production improved slightly in April.

There was only a marginal drop in numbers in April. At the same time, the escalation of containment measures has slowed business activities and led to a further increase in outstandings.

Average input costs rose in April due to higher raw material and fuel prices. Prices charged by service companies fell for the first time in eight months.

The Caixin Composite Production Index, a weighted average of the manufacturing production index and the service business activity index, posted 37.2 in April, down from 43.9 in March. The contraction rate was the second highest in the show’s history.

The survey found that demand was under pressure, external demand deteriorated, supply declined, supply chains were disrupted, delivery times were extended, backlogs increased, workers struggled to return to work, inflationary pressures persisted, and market confidence lagged. the long-term average.

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