Shanghai's first restaurant for pets debuted on Monday. Dishes are only for pets and not pet owners. The restaurant is currently doing a brisk business, with reservations already lined up through August. Photo: IC

The Caixin Services Purchasing Manager's Index (PMI), a private survey that gauges China's services sector activity, rebounded in July at 54.9 from June's 14-month low of 50.3, marking an accelerated expansion of services activity. 

The Caixin Services PMI was released on Wednesday, revealing a rebound from its previous lowest level in 14 months. The growth was showed quicker rebound than that seen on average since the survey's inception in late-2005 at 54.1.

The data showed that the steeper increase in Chinese services activity in July and the stronger upturn coincided with the successful containment of the recent resurgence in Covid-19 cases, leading to greater customer numbers and boosting new order intakes which therefore resulted in an increase of firms registering a renewal in backlogs with a slight rise in payroll numbers. 

The rate of new order growth was shown to quicken from June's recent low and was steep overall thanks to the successful containment of the spread of the virus domestically and customer numbers and demand had been boosted by firmer market conditions. 

The pandemic however continued to weigh on new export business, according to the survey, stating that this sector was broadly stagnant during the latest survey period. 

Analysts stated the job market and services improved since the measure for employment bounced back into expansionary territory with enterprises gradually increasing hiring as market demand increased.

Service sector employment returned to growth at the beginning of the third quarter, with that being said, the rate of job creation was only slight and rising labor costs still suppressed the growth rate of hiring. 

Business confidence regarding the one-year outlook for activity improved during July which picked up from June's nine-month low, as analysts pointed out that service companies remained optimistic. The survey showed that enterprises hoped the pandemic would remain under control to help with further recovery in production capacity. 

The composite PMI output index posted 53.1 in July, which bounced back from the 14-month low of 50.6 in June, indicating a stronger rise in overall Chinese business activity. 

Caixin manufacturing Purchasing Managers' Index (PMI), came in at 50.3 in July, down from 51.3 in June and at the lowest point since May 2020.

Global Times