A private gauge of China’s service activities edged up in May and remained in expansionary territory for the fifth consecutive month, suggesting continued recovery in the services sector after Beijing’s lifting of Covid restrictions.
The Caixin China services purchasing managers index rose to 57.1 in May from 56.4 in April, Caixin Media Co. and S&P Global said Monday. The 50 mark separates expansion from contraction.
Both services supply and demand expanded further in May, with gauges for business activity and total new orders both remaining above 50 for the fifth consecutive month and logging their second-highest readings since November 2020, Caixin said. The subindex for new export orders also stayed in expansionary territory for the fifth straight month, according to Caixin.
Employment in the services sector expanded marginally, with the gauge for employment coming in above 50 for the fourth straight month, as services businesses stepped up hiring to boost production capacity, Caixin said.
“Service providers remained optimistic partly because the market environment improved in the post-Covid era. However, the measure of their expectations for future activity declined for the fourth straight month, and slipped below the historical average.” said Wang Zhe, an economist at Caixin Insight Group.
China’s official nonmfanucturing PMI, which covers both service and construction activity, dropped to 54.5 in May from 56.4 in April, according to official data. The subindex tracking service activity declined to 53.8 in May from 55.1 in April.
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