A private sector survey showed – today, Wednesday – that service activity in China grew last May at the fastest pace in 10 months, while employment levels expanded for the first time since January, indicating a sustainable recovery in the second quarter.
Continuous growth
The Caixin/Standard & Poor’s global services purchasing managers’ index (PMI) rose to 54 points last month from 52.5 in April, growing for the 17th straight month and at the fastest pace since July 2023. The 50-point barrier is the line between growth and contraction.
Combined with the Caixin Manufacturing Purchasing Managers’ Index, which reached its highest level in nearly two years, the readings point to business activity growing strongly last month, although more indicators, including exports, bank lending and retail sales, are due to be released, will give further clues. On the driving force of growth.
This index, which tracks the services and manufacturing sectors, rose to 54.1 last month compared to 52.8 in April, the highest level in a year. New business flows boosted the growth of services activity.
Additional employees
Additional staff were hired last month to handle the ongoing workload, pushing staffing rates to their highest levels since September last year.
However, business confidence levels fell to a 7-month low, amid concerns about the global economic environment and rising prices.
The Chinese economy got off to a strong start in the first quarter, prompting the International Monetary Fund and Moody’s to raise their annual growth forecasts, but the prolonged real estate downturn is affecting any tangible economic recovery.
