Chinese services sector activity jumped sharply in February as the economic recovery picked up speed following the lifting of most Covid-19 pandemic restrictions, a Caixin survey showed on Friday.
According to the agency, the services purchasing managers’ index (PMI), which measures activity in the services sector, rose to 55 points last month from a January reading of 52.9, growing at its fastest pace in seven months. The 50-point mark separates growth from contraction.
The Caixin survey focuses on smaller, private companies, which, according to the findings, mostly benefited from the easing of pandemic restrictions. The survey also found that demand for services was gradually improving during the reporting month, with higher customer numbers and export orders. In fact, new export order growth surged to the highest in nearly four years, data showed. Service companies also reported the biggest growth in new business since April 2021.
“The economy has entered a post-Covid recovery, with services activity showing signs of a stronger recovery than the manufacturing sector. There was still a lot of optimism in the services sector in February as business owners continued to express great confidence in an economic recovery upon the easing of Covid-19 controls,” Wang Zhe, Senior Economist at Caixin, said in a note. He pointed out, however, that “the impact of the pandemic remains far-reaching” and suggested that in the near term the government should focus on policies that would “increase household income and improve market expectations.”
The Caixin reading follows stronger-than-expected government data, reported earlier this week. It showed that the composite PMI, which includes manufacturing, services, and construction sectors activity, soared to 56.4 points last month from 52.9 in January. Analysts say the figures are a sure sign of a solid recovery for the world’s second largest economy following three years of pandemic restrictions.
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