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China’s service sector growth accelerated in March driven by steeper increases in activity and overseas sales, survey results from IHS Markit showed on Tuesday.

The Caixin Purchasing Managers’ Index rose to 54.3 in March from 51.5 in February. The pace of expansion was the fastest in last three months. The score has remained above the neutral 50.0 level for eleventh consecutive month.

The survey showed that new orders increased at the fastest pace in three months despite a slight fall in export business.

Rising intakes of new work led to renewed pressure on operating capacities. As part of efforts to expand capacity and process orders, employment at service providers increased in March.

Average operating expenses rose for the ninth straight month in March. Nonetheless, the rate of inflation was the softest recorded since last September. In order to alleviate pressure on margins, prices charged by services companies increased again.

Amid hopes of post-pandemic recovery, business confidence improved markedly in March, hitting its highest since February 2011.

Underpinned by sharper rise in services activity, the composite output index picked up to 53.1 in March from 51.7 in February.

“To sum up, the economy continued to recover from the epidemic,” Wang Zhe, senior economist at Caixin Insight Group said.

Supply and demand in the manufacturing and services sectors remained in expansionary territory, though at different paces due to the end of the Covid-19 flare-ups in the fall and the winter, the economist noted.

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