China's services sector cools - Caixin
By Abigail Townsend
Date: Monday 05 Jul 2021
(Sharecast News) - China's services sector cooled in June, data showed on Monday, weighed down by a rise in Covid-19 cases in the south of the country.
The Caixin China general services PMI business activity index was 50.3 in June, down on May's reading of 55.1 and the lowest since April last year. A figure above 50.0 indicates growth, while one below 50.0 signals contraction.
Both business activity and new orders rose at their slowest rates for 14 months, while optimism for the year ahead was dampened by the rise in Covid-19 cases.
Wang Zhe, senior economist at Caixin Insight Group, said: "The recent resurgence of Covid-19 in the Pearl River Delta had a certain impact on the services sector.
"External demand marginally improved. The gauge of new export business rose into positive territory, though the rate of expansion was marginal.
"Employment came under pressure: the resurgence of Covid-19, coupled with weakening supply and demand, hurt the labour market. The measure for employment fell into contractionary territory in June for the time in four months, though the contraction was not sizeable."
Prices, however, remained stable as inflationary pressures eased.
The Caixin China general composite output index also fell, to 50.6 from 53.8 in June, with the rate of growth the softest in the current 14-month period. The index is a weighted average of the manufacturing output index and services business activity index.
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