By Gina Lee
Investing.com – China’s services sector activities grew faster in December thanks to rising demand and easing inflation. However, ongoing, small-scale COVID-19 outbreaks throughout the country weighed on the market.
China Caixin services purchasing managers’ index (PMI), which focuses on small companies in coastal regions, rose to 53.1 in December from 52.1 in November. The
Some analysts said the economic recovery from COVID-19 to be slower in the services sector, which is more easily affected by the COVID-19 outbreaks and resultant restrictive measures. Leisure and tourism businesses have specially been hit hard.
The northwestern city of Xi’an saw an outbreak of COVID-19 and has been in lockdown since Dec. 22, 2021.
The Caixin survey also showed that though rising slower, companies’ input prices rose for the eighteenth month in a row. A sub-index for employment rose at the fastest pace since May.
"Supply and demand both improved. As new products helped lift the market sentiment, business activity, and total new business both expanded for the fourth consecutive month. But surveyed enterprises were concerned about the disruptions caused by scattered COVID-19 flare-ups," Caixin Insight Group senior economist Wang Zhe said in a note accompanying the data.
“Although the measure for business expectations remained in positive territory, it fell to the lowest since September 2020 and was remarkably lower than the long-term average.”
Meanwhile, data released earlier in the week showed that the Caixin manufacturing PMI was 50.9. Official data from the National Bureau of Statistics showed that the non-manufacturing PMI was 52.7, while the manufacturing PMI was 50.3, in December.