Economic Buzz: China Services PMI Indicates Sustained Slowdown In October

3 Nov 2022 , 10:58 AM

Chinese service sector saw a sustained slowdown in activity in October, as ongoing efforts to stop the spread of COVID-19 disrupted business operations and weighed on demand. Positively, there was a rise in services employment for the first time in 2022, with firms showing slightly more optimism towards the outlook. On the inflation front, October data showed a slight pick-up in the rate of increase in prices charged by service providers to an eight-month high. This was despite a softening of cost pressures across the sector. After falling below the neutral 50.0 threshold for the first time in four months in September, the seasonally adjusted headline Business Activity Index showed the downturn in Chinas service sector extending into October. At 48.4, down from 49.3, the latest reading was the lowest since May. Turning to prices, Octobers survey data pointed to a slightly faster rise in average fees charged by services companies in China. The rate of inflation was the quickest since February and above the series long run average. The seasonally adjusted Composite Output Index remained below the neutral 50.0 mark in October, registering 48.3 from Septembers 48.5. This was the lowest reading since May, albeit still signaling only a modest downturn. The slowdown was broad-based by sector.Powered by Commodity Insights