The Caixin China General Services PMI rose to 53.4 in September signalling an expansion in the Chinese services sector.
September’s expansion came after a contraction in August with a reading of 46.7.
A PMI reading above 50 signals expansion and a reading below 50 means the sector is contracting.
A fall in COVID cases in China was attributed to helping optimism and growth in the services sector as the outlook improved.
However, the Chinese services sector was not immune to the threat of rising prices seen across the globe and both input and output prices rose from August.
Commenting on the China General Composite PMI TM data, Dr. Wang Zhe, Senior Economist at Caixin Insight Group said:
“The Caixin China General Composite PMI rose to 51.4 in September from 47.2 the previous month. Both market supply and demand recovered, and improvement in the services sector was stronger than in the manufacturing sector. Impacted by the pandemic, overseas demand was weak. Employment was stable overall. Prices gauges remained high, indicating strong inflationary pressure.
“Overall, because the impact of the pandemic was less severe in September than the previous month, services quickly rebounded. In contrast, the recovery in the manufacturing sector was limited, showing the economy still faced downward pressure.
“On the one hand, the epidemic continued to impact demand, supply, and circulation in the manufacturing sector. The state of the epidemic overseas and the shortage of shipping capacity also dragged down total demand. Epidemic control measures have clearly impacted the logistics industry. Domestic demand varied based on different types of goods. The demand for intermediate goods and investment goods was relatively high, while the demand for consumer goods was weak, reflecting consumers’ lack of purchasing power.”