Service sector

In January 2022, China’s service sector falls to a 5-month low

As Covid-19 surges and severe restrictions disrupted consumer spending, a private barometer of China’s services industry fell to its lowest level in five months earlier this year. According to Caixin Media Co. and research firm IHS Markit, the Caixin China Services Purchasing Managers Index fell to 51.4 in January from 53.1 in December. Nonetheless, the reading remained above the 50-point threshold that distinguishes rising and falling month-to-month activity.

It was in line with the competing official non-manufacturing PMI. China’s official non-manufacturing PMI, which includes both services and construction activity, fell to 51.1 in January from 52.7 in December, China’s statistics bureau said on January 30. .

Total new orders rose for the fifth consecutive month in January, but recorded the slowest growth since September, Caixin said. New export orders fell for the first time in four months and fell at the fastest pace since October 2020, Caixin added.

A sub-index gauge for service sector employment also signaled the first decline since August 2021 due to weak demand conditions and non-replacement of voluntary labor departures, Caixin said.

“Companies have become less optimistic,” said Wang Zhe, senior economist at Caixin Insight Group. The data surveyed indicates service companies remain concerned about the ongoing outbreak in China, he said.

Although surveyed service companies remained optimistic about the 12-month outlook for business, “the overall level of positive sentiment slipped to a 16-month low due to uncertainty over the trajectory of the virus and the weather that ‘it will take for global conditions’. to recover,” Caixin said.

Summary of news:

  • In January 2022, China’s service sector falls to a 5-month low
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