By Gina Lee
Investing.com – China released the results of a private survey of Chinese small- and medium-sized firms released on Friday, showing that the country’s services sector grew its fastest pace of growth in over a decade in June. This growth was bolstered by increased consumer demand as COVID-19 lockdown measures were eased.
The Caixin Services Purchasing Manager’s Index (PMI) came in at 58.4 for June, higher than the previous month’s figure of 55 as well as the highest reading since April 2010.
The reading follows the National Bureau of Statistics’ report of a better-than-expected manufacturing Purchasing Manager’s Index (PMI) of 50.9 earlier in the week.
Both figures were above the 50-mark indicating economic growth and indicated a more balance and broader economic recovery from COVID-19.
But investors cautioned that the country’s recovery to pre-pandemic levels could take months, with continuous heavy jobs losses and a resurgence in cases in Beijing originating from the Xinfadi market dampening sentiment.
The rebound suggests China’s overall recovery is becoming more balanced and broader based as life slowly returns to normal in one of the world’s biggest consumer markets, though analysts believe it will take months for activity to return to pre-crisis levels.
“Although businesses were optimistic about the economic outlook, they remained cautious about increasing hiring, with employment in both the manufacturing and services sectors shrinking,” Wang Zhe, Senior Economist at Caixin Insight Group, said in a statement accompanying the data release.
“Addressing the employment problem requires not only macro policies to further promote work resumption, but also more targeted relief measures introduced by governments to tide companies over.”
Caixin’s composite manufacturing and services PMI, released on Wednesday, picked up to 55.7 in June from its reading of 54.5 in May.