Economic Buzz: China Business Activity Falls At Quickest Pace Since February 2020

6 Apr 2022 , 09:32 AM

Chinas seasonally adjusted Composite Output Index fell from 50.1 in February to 43.9 in March, to signal a renewed and steep decline in total Chinese business activity. This signalled the first fall in output since last August, with the rate of reduction the quickest seen since the initial onset of the pandemic in February 2020. The reading reflected renewed falls in both manufacturing and services activity, with the latter noting the faster rate of decline. Total new business likewise fell at the fastest rate for just over two years, with both goods producers and services companies noting marked falls in sales. Composite new export work also fell sharply, and at the fastest rate for 22 months. Business confidence subsequently softened in March, to reach its lowest since May 2020.

Meanwhile, the seasonally adjusted headline Business Activity Index fell from 50.2 in February to 42.0 at the end of the first quarter, to signal a renewed contraction of services activity. Furthermore, the rate of reduction was the steepest seen since the initial onset of the pandemic in February 2020 and sharp. Businesses frequently mentioned that tighter virus containment measures had disrupted operations and weighed on client demand in March.

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