The services sector in China posted its slowest growth seen in nine months during January, owing to the resurgence of coronavirus cases across parts of the country that forced authorities to reimpose lockdowns and restrictions. The Caixin China general services PMI fell to 52 for January from 56.3 during December, but remained above the 50-thresholding indicating expansion.

January’s reading was the lowest seen since April 2020 – after which China had begun emerging out of lockdown and resuming economic activity. Employment in the services sector fell to the lowest level seen since July 2020, with its sub-index dropping to 50.7 in January from 52 in December.

Meanwhile, new export business also reported a slowdown in growth after having returned to a state of expansion in November 2020. While input prices were on the rise, prices charged by services sector companies had risen at a slower pace.

Senior economist at Caixin Insight Group, Wang Zhe, observes, “The services sector’s post-epidemic recovery continued, but at a much slower pace. Some surveyed enterprises said the services market continued to recover, while many said the market had been hurt by the resurgence of the Covid-19 pandemic.”