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China’s Services Industry Sees Fourth Consecutive Month of Growth

Published 09/03/2020, 12:18 AM
Updated 09/03/2020, 12:29 AM
© Reuters.

By Elise Mak

Investing.com – China’s Caixin services PMI for August came in at 54, just slightly down from July’s reading of 54.1. That said, the index still pointed to a recovery in the sector that has now extended into a fourth consecutive month.

The PMI for August managed to stay above the 50-mark separating growth from contraction. In May, the services PMI was 55, then rose to a new high of 58.4 in June, indicating a substantial increase in service sector activity.

“The Caixin China General Services Business Activity Index [services PMI] came in at 54 in August, almost the same as the previous month‘s 54.1. The ongoing resumption of work and normalization of market demand continued to promote the post-epidemic economic recovery,” said Wang Zhe, senior economist at Caixin Insight Group.

The reading indicates developments in the private sector economy by tracking variables such as sales, employment, inventories and prices.

Growth of China’s services sector has remained elevated for four months now. The sector takes up 60% of China’s economy and half of the jobs in the cities. The positive data from the sector indicates the country’s economy is quickening its pace of recovery from the COVID-19 pandemic. The country has been reaping the benefits from its efforts to contain the pandemic, with major cities such as Beijing allowing public gatherings again.

China also unveiled on Monday the official non-manufacturing PMI that covers larger firms in services and construction. The reading came in at 55.2 for August, up from 54.2 in July.

Meanwhile, Japan’s August services PMI came in at 45, slightly below July’s 45.4. Investors now await more PMI figures from Europe and the U.S., alongside U.S. payroll figures, later in the day.

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