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China’s Caixin PMI October Services Activity Grows At A Faster Rate – Cryptovibes.com – Daily Cryptocurrency and FX News

China’s Local Economic Activities


A private survey showed on November 3 that expansion of activity in China’s services sector happened at a faster pace in October, underpinned by robust demand, although rising inflationary pressures weighed on business confidence for the year ahead.

In October, the Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 53.8 – the highest since July – from 53.4 in September. Separating growth from contraction every month is the 50-point mark.

Standing in contrast with an official survey, which showed the expansion in the services sector lost some steam was the improved readings in the private survey, which focuses more on small firms in coastal regions.

The services sector has been slower to recover from the pandemic than manufacturing, since it was more vulnerable to sporadic COVID-19 outbreaks in the country, and that has clouded the outlook for the much-anticipated rebound in consumption in the months to come, analysts say.

The country’s zero-tolerance COVID-19 strategy that was meant to contain infections since late October has caused China’s leisure and tourism businesses to feel the heat. Cities with cases, or those with concerns about the virus, have closed entertainment venues, restricted tourism, or delayed cultural events.

In September, a sub-index for new business edged up to 54.1 from 53.1, boosted by rising export orders that contracted the month before.

For the 16th month in a row, input prices also expanded and at the fastest pace since July due to rising labor and raw material costs. Solid demand allowed firms to pass some of the costs to consumers, driving an increase in prices that surged to the highest in three months.

The survey showed that, however, persistent inflationary pressures and concerns about supply chains drove business confidence to the lowest in four months.

In the previous month, Caixin’s composite PMI, which includes both manufacturing and services activity, was 51.4 but edged up to 51.5 in October.

Senior economist at Caixin Insight Group, Wang Zhe said:

“Supply and demand recovery both retained momentum. Employment was more or less stable. Gauges for prices were high.”

“Policymakers should not only take effective measures to stabilize commodity supplies and prices, but also pay close attention to downstream firms, especially small and midsize ones.”



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