Customers enjoy the meals at a hot pot restaurant in Southwest China's Chongqing municipality. File Photo: Xinhua

Private Caixin services PMI, which gauges China's services sector activity, came in at 51.5 in February, matching the market expectation, down from 52 in January. Although the index declines for a third consecutive month and stands slightly above the expansion-contraction line, the market expectation for the PMI in the following months is high.

Caixin earlier released February manufacturing PMI of 50.9, down 0.6 percent from the previous month. The declines of both manufacturing and services PMI set the Caixin composite PMI at 51.7, the softest increase since May, 2020. The decline of private Caixin PMI data corresponds with statistics released by National Bureau of Statistics.

Surveyed service industry enterprises reveal that the damage of COVID-19 globally has dampened demand and that new export businesses and new export orders had contracted. 

The surge of domestic COVID-19 community cluster cases in January impact the service industries,  said Tian Yun, vice director of the Beijing Economic Operation Association, in an interview with the Global Times on Wednesday, adding that the index reading is actually better than industry insiders' expectation based on real-economy analysis. 

Tian believes that due to good results of the COVID-19 control efforts in China and the expansion of vaccine inoculation, service PMI will increase gradually in the following months when the weather turns warmer. He attributed the increase of service activity costs, including materials and employment, to the recovery of Chinese activities.

The employment index in the service industry drops to beneath the expansion-contraction line, ending the six-month long expansion. Resulting from the bearish market, enterprises' employment attitudes were cautious. Surveyed enterprises said positions were remaining vacant after employees resigned in February.

Global Times