Financial News: China Service Sector Gains Strength In February

China Service Sector Gains Strength In February

03/02/2023 - 23:53:00 (RTTNews)

(RTTNews) - China's service sector activity gained strength in February with strong support from new business and employment after the easing of pandemic-related restrictions, survey results published by S&P Global showed on Friday.

The Caixin services Purchasing Managers' Index picked up to 55.0 in February from 52.9 in January. The reading was slightly above economists' forecast of 54.7 and the threshold 50.0.

The latest reading also suggests that the pace of expansion was the strongest since August.

New business grew the most since April 2021. Moreover, new business from abroad continued to rebound in February.

Driven by new business and improving market conditions, firms added workers for the first time in four months. The rate of job creation was the steepest seen since November 2020.

On the costs front, input prices increased due to greater costs for staff, raw materials and office supplies. Prices charged by service providers rose at a marginal pace which was little-changed from those seen in the three preceding months.

Business confidence remained strong in February, despite the degree of optimism slipping slightly from January's near 12-year high.

The composite output index rose 3.1 points to 54.2 in February. A reading above 50.0 indicates expansion in the sector.

"The foundation for <a href=https://www.rttnews.com/3337357/zero-covid-policy-damps-china-2022-gdp-growth.aspx target=_blank >economic recovery </a>has yet to solidify, and it will take time for production and social order to get back to normal," Wang Zhe, a senior economist at Caixin Insight Group said.

"Beijing said restoring and expanding consumption should be prioritized," said Zhe.

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