According to data released by the National Bureau of Statistics (NBS), manufacturing activity in China remained steady during January while the services sector expanded at a faster pace than in the previous month. China’s official manufacturing PMI slid to 50.0 in January from 50.2 in December while the services PMI climbed higher to 54.1 in January from 53.3 in December.

Amid the coronavirus outbreak, the reading for the manufacturing sector is somewhat comforting as there are worries that the lockdown could impede activity in this sector and drive a slowdown in economic growth. However, January’s figures don’t yet account for the impact of the virus outbreak, which analysts expect could hurt the GDP in Q1 2020.

Amid the prolonged trade tensions, the services sector in China has offered some relief and support to the economy. Weak domestic demand and trade tensions had driven prolonged weakness in the manufacturing sector but the services sector had continued to remain in expansion through 2019.

However, the services sector can be affected by the coronavirus outbreak in the coming weeks and next month’s figures could shed some light on this. On account of the lockdown measures enforced by the Chinese government, services like transportation, catering and tourism are likely to be hit over efforts to contain the spread of the virus.