Economic Indicators1 hour ago (Jun 03, 2021 12:57AM ET)© Reuters.
By Gina Lee
Investing.com – China’s services sector grew at a slower pace in May due to decreasing overseas demand and rising input costs for businesses.
Data released earlier in the day said Caixin Services Purchasing Managers Index in May fell to 55.1, below April’s 56.3 but above the 50-mark indicating growth. The reading follows Tuesday’s release of the Caixin manufacturing PMI, which increased to 52 in May, the highest level since December 2020.
The sector’s slowdown was partly due to decreasing demand in global markets as the recent outbreaks of COVID-19 in parts of the world limited business activities, said the Caixin survey, adding that a gauge of export orders fell into contraction.
Although the economic recovery from COVID-19 of services sectors was slower than that of the manufacturing sector, improvement in consumption has promoted activities in China’s services sector, including smaller and private firms.
Total new orders increased, and services firms hired more employees for a third consecutive month, but both at a slower pace. Input costs also rose sharply in May, while raw materials were more expensive, leading to worsening price pressures, the survey added.
“Services supply and demand continued their upward trends for the 13th consecutive month, though both expanded at a slower pace than in the previous month… inflationary pressure was enormous as price gauges continued to rise. Both the measures for input costs and the prices service providers charged rose to their highest points of the year,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.China Services Sector Growth Slows with Weaker Demand, Higher Input CostsAdd a Comment