Recent rise of the Delta variant in China is causing concern
Data emerging from China revealed that the nation’s service sector growth sped up in July, reaching its highest level since May.
However, the ongoing spread of the Delta variant of the coronavirus remains a concern and is posing a threat to a full recovery.
The Caixin /Markit services Purchasing Managers’ Index (PMI) rose to 54.9 in July, up by 4.6 from the month before. Any value above 50 represents monthly growth rather than contraction.
So far the recovery of the service sector in China has been outpaced by that of its manufacturing sector.
However, the more recent rise of the Delta variant is causing concern and leading to an element of uncertainty of China’s near-term outlook.
July figures suggested Covid-19 was successfully contained in the southern region of China, according to Wang Zhe, senior economist at Caixin Insight Group, however, he said the latest outbreak would be likely too negatively impact August’s PMI figures.
“The economy still faces enormous downward pressure, and we need to ensure business owners remain confident,” Wang said.