China’s Services Sector Growth Sees Slowest Pace in Nine Months in January By Investing.com

© Reuters.
© Reuters.

By Gina Lee

Investing.com – China’s services sector grew at slowest pace of growth in nine months in January, according to a private sector survey, as an outbreak of COVID-19 cases in the country impacted consumer sentiment.

January’s , released earlier in the day, was 52 and remained above the 50-mark indicating expansion. In comparison, December’s figure was 56.3.

A sub-index for employment came in at 50.7, the lowest since July 2020 and down from December’s 52 figure. New export business growth, which had only returned to expansion in November 2020, slowed from the previous month.

The data was largely in line with disappointing released earlier in the week, and further suggests a slowdown in China’s economic recovery.

The was 51.5, with the at 51.3 and the at 52.4 respectively.

The services sector survey also showed that although input prices continued to rise, the rise in prices charged by services firms slowed. The sector has seen a slower recovery from the impact of COVID-19 than the industrial sector, as it is more vulnerable to restrictive measures, such as lockdowns, imposed to curb COVID-19 outbreaks.

“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.” Caixin Insight Group senior economist Wang Zhe said in a statement accompanying the data release.

A recent outbreak of COVID-19 cases in northern China was the worst seen since March 2020, with local lockdowns imposed in January to curb the spread of the virus. The number of cases has dropped over the past few days, however travel over the upcoming Lunar New Year holidays has been discouraged.

Although Chinese service firm remain positive about their 2021 prospects, business expectations over the next 12 months dropped to their lowest levels in four months.

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