The Chinese services sector recorded its slowest rate of growth in 14 months last month, as a fresh coronavirus outbreak in South China impacts the Chinese economic recovery.
Data from The Caixin/Markit services Purchasing Managers’ Index (PMI) released on Monday showed that the Chinese Services sector recorded a decline to 50.3 in June. Last month’s figure was the lowest since April 2020 and a sharp drop from the 55.1 registered in May. June’s figure held just above the 50-mark which separates growth from contraction. Readings above 50 indicate an economy in expansion, whilst readings below 50 indicate an economy in contraction.
Meanwhile, the Caixin manufacturing PMI in June, released last week, came in at 51.3. June’s Caixin manufacturing PMI came in lower than the 51.8 figure forecast by market analysts and lower than the 52 reading registered in May’.
The latest economic news from the world’s second-largest economy suggests that demand may have peaked in both the services and manufacturing sectors.
Chinese Manufacturing Returned to Normal
Wang Zhe, Senior Economist at Caixin Insight Group said in an accompanying statement:
“The manufacturing industry has returned to normal in the wake of the epidemic, while the services industry is still sensitive to regional resurgences,”
“In addition, the low base effect from last year will continue to weaken in the second half of this year. Inflationary pressure, intertwined with the economic slowdown, will still be a serious challenge.”
