By Gina Lee
Investing.com – China's services sector activity grew at a slower pace in November as inflationary pressures and small COVID-19 outbreaks continue, a private survey showed on Friday.
The Caixin services purchasing managers' index was 52.1, lower than the 52.6 in forecasts prepared by Investing.com and the 53.8 figure reported during the previous month. However, it remained above the 50-point mark indicating growth.
The Caixin survey, which focuses more on small firms in coastal regions, follows data released by the National Bureau of Statistics (NBS) earlier in the week that showed the non-manufacturing PMI was at 52.3.
The NBS data also said the manufacturing PMI was at 50.1, and Wednesday’s Caixin manufacturing PMI was at 49.9.
The services sector has been slower to recover from COVID-19 than manufacturing, as it is more vulnerable to COVID-19 outbreaks and the accompanying restrictive measures. Continuous COVID-19 outbreaks, although small, are clouding the outlook for the anticipated rebound in consumption for the foreseeable future. China's leisure and tourism businesses have been particularly impacted as the country continues its zero-tolerance approach to the virus.
Companies saw input prices expand for a 17th consecutive month, and at the fastest pace since May 2020, thanks to rising labor and raw material costs. Prices charged also rose, albeit at a slower pace.
"Policymakers should still focus on supporting small and midsize enterprises. They should also pay attention to problems including deteriorating job prospects, limited household income growth, and weak consumer purchasing power," Caixin Insight Group senior economist Wang Zhe told Reuters.
"Enterprises are still facing high cost pressures. Policymakers should take inflation seriously."