China’s Services Activity Growth Hits Historic High in July

Source: Caixin 

China’s services activity rebounded with above-average growth in July, following successful efforts to contain the rise of COVID-19 cases.

• The headline seasonally adjusted Business Activity Index climbed to 54.9 in July, following June’s 14-month low of 50.3.
• Growth for the month was quicker than the average of 54.1 since the survey started in 2005.
• New order intakes saw a steep increase as businesses noted that efforts against the pandemic helped boost customer sentiment and demand.
• Export business was broadly stagnant as the pandemic continued to weigh on global demand.
• Workloads increased in July by the fastest in over a year, linked to higher amounts of new business and insufficient capacity.
• Input cost inflation posted a notable acceleration as overall costs climbed faster than the series average, with higher staff, fuel, and raw material costs.
• Business confidence for the next year picked up from June but remained softer than average.
• Businesses are hopeful that the pandemic’s end would boost sales both domestically and overseas.