China’s private Caixin services purchasing managers’ index (PMI) stood at 56.4 in April, the fourth consecutive monthly expansion which observers said mirrored a reinvigorated services economy fueled by a quick rebound in consumption. The April index was also the second-highest since December 2020 after March reading recorded 56.4.
The indexes measuring service business activity and new orders also recorded its second highest reading since December 2020, significantly higher than the 50-point mark which separates expansion and contraction.
Notably, new export orders in April also continued to push into expansion territory for the fourth consecutive month, while the nation’s tourism industry received a particular boost after China optimized COVID measures.
Robust market supply and demand also lifted up the services industry employment in April, with the index tracking job rates remaining in expansion territory for three months in a row despite a two percentage point drop from March.
In April, optimism over the service economy remained quite high, as enterprises anticipated improved economic conditions and strengthened consumer demand as China fully emerges from the epidemic.
Observers said the upbeat figure reflected the vigor and sustainability of China’s consumption rebound, which is set to continue gaining momentum over the remaining months of the year, providing a further shot to the services activities.
The recently concluded May Day holidays, which were dubbed the “most prosperous” in recent years also offer a glimpse into China’s consumption potential. A total of 274 million passenger trips were made during the May Day holidays this year, up 70.83 percent year-on-year, equivalent to 119.09 percent of 2019’s on a like-for-like basis, according to data released by the Ministry of Culture and Tourism late on Wednesday.
Analysts, nevertheless, also warned over an uneven economic recovery, calling for more policy support to help small- and medium-sized manufactures to overcome headwinds.
In April, China’s private Caixin Manufacturing Purchasing Managers’ Index (PMI) stood at 49.5, down from previous month’s 50.0. The official PMI released by the National Bureau of Statistics on April 30 also dropped to 49.2 for April.
Caixin analyst Wang Zhe said that the contrast between services and manufacturing activity revealed that China’s economic recovery has achieved a solid foundation. And Wang suggested that government policies targeting domestic demand, stabilizing employment and improving expectation were still required.
(Global Times)
