China’s services activity rebounds strongly as demand rebounds – Caixin PMI

BEIJING, March 3 (REUTERS) — China’s service sector activity grew at the fastest pace in six months in February as the removal of tough COVID-19 restrictions revived customer demand, spurring a solid increase in employment, a private sector survey found on Friday.

The Caixin/S&P Global Services Purchasing Managers’ Index (PMI) rose from 52.9 in January to 55.0 in February, marking a second consecutive monthly increase in activity after the government abruptly reversed measures antivirus in december.

The 50 point mark separates the expansion and contraction of activity on a monthly basis.

The reading coincides with the official services PMI released on Wednesday, suggesting a strong recovery in the sector is underway.

Service companies saw the biggest increase in new business since April 2021, while growth in new export orders accelerated to its highest level in nearly four years, the Caixin survey showed. .

Improving market conditions also fueled a strong increase in employment. Businesses began hiring additional workers for the first time in four months and the rate of job creation was the highest since November 2020 as spending and travel increased.

Chinese Human Resources Minister Wang Xiaoping said on Thursday that the country’s labor market was better than expected in January and February.

Commerce Minister Wang Wentao also said on Thursday that the country’s consumption has rebounded significantly this year, with major shopping areas and the catering sector growing markedly.

Thanks to the reopening of COVID, business confidence in China’s services sector remained strong last month, although the degree of optimism dipped slightly after hitting the highest levels in nearly 12 years in January.

● “The economy has entered a post-COVID recovery, with service activity showing stronger signs of recovery than manufacturing,” said Wang Zhe, economist at Caixin Insight Group. “But the impact of the pandemic remains considerable.”

“In the short term, relevant policies should focus more on increasing household incomes and improving market expectations.”

The Caixin/S&P composite PMI, which includes both manufacturing and services activity, rose from 51.1 the previous month to 54.2 in February, marking the fastest expansion since June.

(Reporting by Ellen Zhang and Ryan Woo; Editing in Spanish by Tomás Cobos)