BEIJING – A private indicator of China’s service sector activity rose to the highest level in more than a decade in June, as the easing of virus control measures in most of the country boosted demand.
Caixin China’s index of service purchasing managers rose to 58.4 in June from 55.0 in May, Caixin Media Co. and research firm Markit said on Friday. The reading came well above the 50 mark that separates expansion from contraction, indicating rapid month-to-month expansion.
June’s result was the highest since April 2010, when it stood at 58.5, according to financial information provider Wind.
According to Caixin, total new business increased at the highest rate since August 2010, and service providers forecast further increases in customer demand in the coming months.
Domestic and foreign supply and demand rebounded as the coronavirus crisis remained largely under control in China, said Wang Zhe, senior economist at Caixin Insight Group. Employment remained a key problem and it will take time for the economy to fully recover, the economist said.
Although the supply and demand for services recovered, the sub-index that measures the sector’s contracting remained in negative territory for the fifth consecutive month in June, as companies were cautious about the expansion of contracting amid insufficient demand. .
China’s official non-manufacturing purchasing managers’ index, which covers services and construction, rose to a seven-month high of 54.4 in June from 53.6 in May, the National Bureau of Statistics said earlier this week.
The Caixin PMI leans more towards smaller companies, while the official one leans more towards larger companies.
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