China’s Service Activity Rebounds in September-Caixin

Source: IHS Markit.

China’s services bounced back to growth in September as the resurgence in local COVID-19 cases slowed down and boosted supply and demand in the sector. CSI 300 Index up +1.31%, CNY USD up +0.05% 

• The Caixin China General Services Purchasing Managers’ Index stood at 53.4 last month, up from 46.7 in August, signaling a renewed and strong increase in service activity.
• The improved pandemic control situation has led to a solid increase in sales and output across the sector that drove employment into expansion territory in September.
• Wang Zhe, a senior economist at Caixin and economist at Caixin Insight Group stated that the government should focus on improving pandemic control and alleviating supply-side pressure.
• The measure of business expectations further rose in the expansionary territory in September, though still below its long-term average, with enterprises showing strong confidence that the pandemic will continue to be controlled effectively.
• Meanwhile, input and output prices both rose in the sector amid rising labor, freight, and raw material costs, signaling the hidden threat of inflation.