Amid a surge in coronavirus cases and zero-COVID policy, China's services growth recorded a slow start in 2022, a private survey reported on Monday.
The Caixin Services Purchasing Manager's Index (PMI), which gives an independent snapshot of operating conditions in the sector, fell to 51.4 in January from 53.1 in December, reported Global Times.
A number above 50 indicates an expansion in activity, while a figure below that points to a contraction.
The previously released Caixin China Manufacturing PMI fell 1.8 percentage points to 49.1 in January 2022, the lowest since March 2020.
The simultaneous decline of the two major industries dragged down the Caixin China Composite PMI by 2.9 percentage points to 50.1 in January 2022, slightly above the marginal standard.
The trend shown by Caixin's survey result was in line with that of the National Bureau of Statistics (NBS). The NBS released manufacturing PMI in January 2022 which recorded a decline of 0.2 percentage points to 50.1, while the services PMI fell 1.7 percentage points to 50.3, driving the composite PMI down 1.2 percentage points to 51.0, reported Global Times.
Wang Zhe, a senior economist from Caixin, said that the plunge in domestic and overseas demand, continued intensive employment situation and high price of multiple raw material declined optimism on the service sector.
Responding companies reported that relatively low market demand and insufficient replenishment of new job positions had resulted in an inactive labour market. Companies also reported that the epidemic control policies had some impact on production.
Caixin's survey pointed out the high price for specific raw materials was the main reason that raised the companies' cost in service sector, which made input price index much higher than producer's price index in January 2022, reported Global Times.
Moreover, regional COVID-19 outbreaks in Xi'an of Northwest China's Shaanxi Province and Beijing during December 2021 and January 2022 constrained production, transportation, and marketing of industries across the country, according to the Caixin report.
( With inputs from ANI )
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