China’s Services Sector Grows at Slower Pace in July
The services sector in China continued to grow during July, but at a slower pace than in the previous month, when it had soared to the highest level in a decade. The Caixin/Markit services PMI slipped to 54.1 in July from 58.4 in June, but remained above the 50-threshold indicating expansion in the sector.
Unlike China’s manufacturing sector, the rebound in the services sector has been more gradual even as lockdown restrictions are eased around the country. This sector has been weighed down by higher job losses and reduction in wages, and has come under more pressure lately over a resurgence in coronavirus cases, especially in the western and northeastern regions of China.
New export orders received by services businesses in China fell once again during July, after a brief moment of expansion – one of the main factors that drove July’s PMI reading lower. In addition, jobs in the sector continued to contract for the sixth straight month, although, the pace of contraction has eased.
On a positive note, China’s services companies expressed greater optimism about their business outlook for the next year. Business confidence among companies surveyed rose to the highest level seen since March 2015, boosted by hopes of economic recovery in the aftermath of the pandemic.
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