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BEIJING, Sept. 5 (Reuters) – A sharp rebound in China’s facilities sector slowed in August amid further COVID-19 surges, but business confidence hit a nine-month high on rare smart news for the suffering economy, a personal survey showed on Monday.
Caixin Services’ purchasing managers’ index (PMI) fell to 55. 0 from a 15-month high of 55. 5 in July, but remained in expansion territory. The 50-point mark separates expansion from contraction on a monthly basis.
The reading was in line with China’s official survey, released last week, which showed that the expansion of the services sector has slowed, likely due to prolonged COVID disruptions and the effect of the worst heat waves in decades.
Total new orders rose for a third straight month, but foreign demand remained subdued, with the export start-up sub-index falling for the eighth straight month amid continued restrictions.
Despite the buildup of new business, corporations have laid off staff. The service sector is one of the most vulnerable industries under Beijing’s COVID 0 policy and has also been affected by a sharp drop in the real estate market.
Service providers continued to struggle with emerging costs, and the input value sub-index emerged at its fastest speed in four months. in the fees they charged.
The world’s largest economy narrowly escaped contraction in the current quarter due to widespread COVID lockdowns, and emerging symptoms of a recovery in early summer temporarily faded amid new virus outbreaks and mobility restrictions. The national railway hit an eight-year low in August.
Analysts expect even stricter anti-virus measures ahead of the communist party’s key congress in October. Several megacities have tightened lockdown measures this week.
“With the accumulation of adverse points, such as recurrent cases of COVID-19 and herbal errors resulting in a slow hard labor market and declining customer demand, the government is accentuating measures such as more subsidies and assistance for low-income groups,” Wang said. Zhe said, Senior Economist at Caixin Insight Group.
However, business confidence remained firmly in the territory in August, and corporations expected a slow normalization of conditions.
Caixin’s August composite PMI, which includes production and parent, fell to 53. 0 from 54. 0 in July, and the expansion offset an unforeseen contraction in factory activity.
Caixin PMI is compiled via S
(Reporting via Liangping Gao, Ellen Zhang and Ryan Woo; Editing via Kim Coghill)