China’s Feb Services Activity Grew at Slowest Pace in Six Months

Source: IHS Markit

China’s service sector expanded at the slowest rate in six months in February, as businesses expressed a stronger optimism for the upcoming year. CSI 300 Index down -0.59%, CNY USD up +0.03%

• The seasonally adjusted headline business activity index dropped to 50.2 points in February from 51.4 in January. Any score above 50 signaled a marginal increase in services activity.
• A sub-index for new business stood at 48.8, the first drop since August last year, as services firms reported measures to contain Covid-19 cases, including the travel restrictions.
• New export business dropped for the second consecutive month, even though at a slower rate. The decline led to another reduction of payrolls at China’s services firms.
• Wang Zhe, senior economist at Caixin Insight Group stated that demand for services shrank as supply grew at a limited pace.
• China’s economy bounced back strongly from a pandemic-driven plunge in 2020, but momentum began to wane in the summer of last year as anti-Covid measures hurt spending and consumer sentiment.