China’s Services PMI Falls Three Straight Months in May

Source: S&P Global

China’s services sector shrank for a third consecutive month in May, signaling a slow recovery despite the easing of COVID lockdowns in Shanghai. CSI 300 Index up +1.87%, CNYUSD up +0.31%

• The Caixin services purchasing managers’ index (PMI) jumped to 41.4 in May from 36.2 in April, increasing slightly as authorities started to roll back on some strict restrictions that disrupted global supply chains.
• Meanwhile, the figure remained below the 50-point level that separates growth from contraction.
• Analysts expect the weakness in China’s services sector to persist due to the government’s zero-COVID policy.
• The Caixin survey indicated new business dropped for the fourth consecutive month in May as restrictions on mobility kept customers at home and hampered operations.
• China’s economic activity fell sharply in April as the nation struggled with the worst COVID-19 outbreak since 2020.