A staff member presents a serving spoon at a Hunan cuisine restaurant in Yuelu District of Changsha, central China's Hunan Province, April 15, 2020.  (Xinhua/Chen Zeguo)

China's private Caixin Services Purchasing Manager's Index (PMI), which measures national services sector activity, came in at 51.4 in January 2022, lower than last month's 53.1 and also the lowest level in the past five months, Caixin released the data on Monday. 

The previously released Caixin China Manufacturing PMI fell 1.8 percentage points to 49.1 in January 2022, the lowest since March 2020. The simultaneous decline of the two major industries dragged down the Caixin China Composite PMI by 2.9 percentage points to 50.1 in January 2022, slightly above the marginal standard.

The trend shown by Caixin's survey result was in line with that of the National Bureau of Statistics (NBS). The NBS released manufacturing PMI in January 2022 which recorded a decline of 0.2 percentage points to 50.1, while the services PMI fell 1.7 percentage points to 50.3, driving the composite PMI down 1.2 percentage points to 51.0.

Wang Zhe, a senior economist from Caixin, said that the plunge in domestic and overseas demand, continued intensive employment situation and high price of multiple raw material declined optimism on the service sector. 

Responding companies reported that relatively low market demand and insufficient replenishment of new job positions had resulted in an inactive labor market. Companies also reported that the epidemic control policies had some impact on production.

Caixin's survey pointed out the high price for specific raw materials was the main reason that raised the companies' cost in service sector, which made input price index much higher than producer's price index in January 2022. 

Regional COVID-19 outbreaks in Xi'an of Northwest China's Shaanxi Province and Beijing during December 2021 and January 2022 constrained production, transportation, and marketing of industries across the country, according to the Caixin report. 

Wang noted that economic policies in 2022 should focus on addressing industry structure improvement, employment and supporting small and medium-sized enterprises in order to confront market challenges.

Global Times