BEIJING (Reuters) – Activity in China’s services sector grew at its slowest pace in five months in June, a private survey showed on Wednesday, as slowing demand weighed on the economic recovery from the COVID pandemic -19.
The services PMI index calculated by Caixin/S&P Global stood at 53.9 last month, against 57.1 in May, above the threshold of 50 separating contraction and expansion of activity.
However, this is its lowest level since January.
Data released last week by the National Bureau of Statistics (BNS) showed a similar drop in the official services PMI.
After growing at a faster than expected pace in the first quarter, the Chinese economy lost momentum in the April-June period due to worsening deflation, high youth unemployment and weak external demand.
Business activity and new orders grew at a much slower pace in June compared to May. Growth in new exports has also slowed, but maintained a healthy pace.
Companies in the sector reported a sharp rise in input costs at the end of the second quarter, as the rate of inflation was little changed from May, while prices charged by service providers rose slightly in June.
The rate of job creation in the services sector also rose to its highest level in three months, but remained subdued overall.
The composite PMI index calculated by Caixin/S&P, which combines the activity of the manufacturing sector and that of the services sector, fell to 52.5 in June, against 55.6 the previous month.
(Report Ellen Zhang and Ryan Woo; Camille Raynaud)
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