MARKET WATCH | Published: July 3, 2020 at 12:06 a.m. ET
BEIJING–A private gauge of China’s service-sector activity surged to the highest level in more than a decade in June, as the easing of virus-control measures in most parts of the country drove demand.
The Caixin China services purchasing managers index rose to 58.4 in June from 55.0 in May, Caixin Media Co. and research firm Markit said Friday. The reading came in far above the 50 mark that separates expansion from contraction, signaling rapid month-on-month expansion.
June’s result was the highest since April 2010, when it stood at 58.5, according to financial-information provider Wind.
Total new business rose at the sharpest rate since August 2010, with service providers forecasting further increases in client demand in the coming months, according to Caixin.
Supply as well as domestic and overseas demand recovered as the coronavirus crisis remained largely under control in China, said Wang Zhe, a senior economist at Caixin Insight Group. Employment was still a key problem and it will take time for the economy to fully recover, the economist said.
Although supply and demand in services recovered, the subindex measuring the sector’s hiring stayed in negative territory for the fifth straight month in June as companies remained cautious about expanding hiring amid insufficient demand.
China’s official nonmanufacturing purchasing managers index, which covers services and construction, rose to a seven-month high of 54.4 in June from 53.6 in May, the National Bureau of Statistics said earlier this week.
The Caixin PMI is tilted more toward smaller companies while the official one is weighted more toward larger ones.
SOURCE : https://www.marketwatch.com/story/chinas-june-caixin-services-pmi-hits-10-year-high-2020-07-03