A private gauge of China’s services sector retreated further in February and slipped to a six-month low, as Beijing’s strict anti-coronavirus restrictions weighed on consumer spending.
The Caixin China services purchasing managers index dropped to 50.2 in February from 51.4 in January, Caixin Media Co. and research company IHS Markit said Thursday. The reading remained above the 50 mark, which separates month-to-month activity expansion from contraction.
It pointed in the same direction as the competing official non-manufacturing PMI, although the official gauge accelerated in February. China’s official non-manufacturing PMI, which includes both services and construction activity, increased to 51.6 in February from 51.1 in January, China’s statistics bureau said Tuesday.
A subindex gauge for total new orders contracted for the first time in six months and marked the quickest decline since April 2020, Caixin said. The decline was partly caused by slow foreign demand, with new export business contracting for the second straight month in February, said Caixin.
A subindex gauge for employment in the services sector continued its downward trend in February, falling slightly for the second month in a row, said Caixin.
“Over the past month, COVID-19 flare-ups in several regions had a relatively large impact on the services sector,” said Wang Zhe, a senior economist at Caixin Insight Group. However, surveyed companies are confident about government efforts to control the epidemic and “the measure of future activity expectations rose further into positive territory, hitting its highest in three months,” he said.