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Dow Jones Newswires

July 5, 2022, 2:22 a.m. EDT

China service sector activity rebounded in June as COVID curbs eased

By Associated Press

China’s Caixin services purchasing managers’ index, a private gauge, rebounded in June as Covid-19 restrictions were eased in the world’s second-largest economy.

The Caixin services PMI rose to 54.5 in June from 41.1 in May, Caixin Media Co. and research company S&P Global said Tuesday. That marked the quickest expansion recorded since July 2021.

June’s reading was above the 50 mark that separates contraction from expansion, and ended a three-month streak of decline. The reading pointed in the same direction as a competing official gauge released last week, which also came in above 50.

Total new orders returned to growth in June and increased at the fastest pace since October 2021, Caixin said. However, export orders stayed in contractionary territory for a sixth straight month, though the decline eased notably.

The subindex measuring employment across the service sector continued to decline in June, according to Caixin.

“Recovery in supply and demand didn’t spill over into the shrinking labor market, with companies still cautious about expanding hiring as they sought to keep costs down,” said Wang Zhe, a senior economist at Caixin Insight Group.

Overall, the level of business confidence in the long term remained strong, though some of the companies surveyed expressed concerns over the long-lasting impacts of the pandemic on their operations and on customer demand, said Caixin.

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