China Caixin services PMI drops to lowest level in more than 2 years

Private-scale measurement activity in China’s services sector has fallen to its lowest level since the initial outbreak of the pandemic in February 2020, as escalating measures to contain the spread of the virus weigh heavily on customer demand.

Caixin’s service purchasing managers’ index fell to 36.2 in April from 42.0 in March, Caixin Media Co. said on Thursday. and IHS research company Markit. The reading remained well below the 50 mark separating the contraction from the expansion.

The index pointed in the same direction as the official non-manufacturing PMI, which includes both service activity and construction. China’s official non-manufacturing PMI rose to 41.9 in April from 48.4 in March, the statistics office said on Saturday.

“Both activity and new orders fell at the second strongest pace since the survey began in November 2005, and were only surpassed by those observed at the initial start of the pandemic in February 2020.” Caixin said in a statement.

During the recent five-day business holiday, which ended on Thursday, Chinese travelers made 160 million trips, more than 30.2% less than the previous year and equivalent to 66.8% of trips made during the 2019 holidays, said the Ministry of Culture and Tourism of China. Wednesday.

In Thursday’s data, an indicator of the subindex of export orders declined at the sharpest pace since May 2020, while employment in the services sector fell slightly after being in contraction territory. for four consecutive months, Caixin said.

Companies surveyed for the index saw a softer, but still solid, increase in average input costs during April, driven by higher commodity prices, fuel and spending on measures to limit spread of COVID, Caixin said.

“The new round of COVID-19 outbreaks has hit the services sector hard,” said Wang Zhe, a senior economist at Caixin Insight Group.

Employers were confident that COVID outbreaks would remain under control, although some expressed concern that control measures would be in place for too long, he added.

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