Service sector

China’s service sector growth hits 6-month low

China’s services sector grew at the slowest pace in six months in February due to a further decline in overall new business amid the ongoing pandemic and virus control measures, the results of an IHS Markit survey revealed on Thursday.

The Caixin Services Purchasing Managers Index fell to 50.2 in February from 51.4 in January.

The score signaled only marginal growth in service activity. Notably, the expansion was the weakest since the start of the current growth streak last September.

Customer demand fell for the first time in six months due to measures taken to contain the pandemic. Capacity pressures eased in February, as evidenced by a more moderate increase in backlog workloads.

Service-sector employment declined for the second consecutive month in February. However, the pace of job cuts has slowed since January.

On the price front, input price inflation increased at the weakest pace since August 2021. Similarly, prices charged for services also recorded slower growth.

Although companies recorded a further slowdown in growth momentum in February, optimism around the 12-month production outlook improved to a three-month high.

The composite production index, which measures the performance of manufacturing and services, stood at 50.1 in February, unchanged from January and signaling only fractional growth in the global business activity.

Epidemic control measures have been tightened, limiting transportation and sales, said Wang Zhe, senior economist at Caixin Insight Group.

Under the “triple pressure” of contracting demand, supply shocks and weakening expectations, the economyThe recovery is still not robust. Stabilizing economic growth remains an important goal of the government, Zhe added.

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