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China’s service sector recovery accelerates in March

BEIJING, April 6 (Reuters) – The recovery in China’s services sector accelerated in March as companies hired more workers and increased business optimism, although inflationary pressures persisted, a private sector survey showed on Tuesday.

The Caixin / Markit Purchasing Managers Index (PMI) for services rose to 54.3, the highest level since December, from 51.5 in February, well above the 50 mark that separates growth from growth. contraction.

Companies posted the largest increases in activity and overall sales in three months. New export business continued to contract, but at a slower pace.

An employment sub-index was back in positive territory as companies hired more workers than they laid off, the survey showed.

The findings largely coincided with an official poll published last week.

Chinese authorities successfully curbed internal transmission of the COVID-19 virus during the winter, causing quarantine restrictions and testing requirements to be relaxed.

“The Covid-19 outbreaks that occurred in the fall and winter have basically subsided, and the service sector has recovered rapidly with expanding supply and demand,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.

However, rising input costs and product prices shown by surveys of both the service and manufacturing sectors are not conducive to a sustained post-epidemic recovery, according to this expert.

Costs for service companies continued to grow, according to the survey, although at a slower pace than the previous month. The companies increased their prices charged for the eighth consecutive month and by the highest amount so far this year.

Chinese service companies were very optimistic about the current year, with business expectations reaching the highest level since 2011.

Initially, the service sector, more vulnerable to social distancing restrictions, had taken longer to recover from the pandemic than the industrial sector.

For its part, Caixin’s composite manufacturing and services PMI, also released on Tuesday, rose to 53.1 in March, from 51.7 the previous month.

(Information by Gabriel Crossley; Edited by Kim Coghill, translated by Tomás Cobos)

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