China’s service sector activity at its lowest level of the year
The leading indicator, which is considered the barometer of activity in the services sector in China, fell to its lowest level of the year as job growth in the sector slowed and market confidence declined.
The China General Services Purchasing Managers’ Index (PMI) from economic and financial news service Caixin declined 1.6 points to 51.8 in September compared with the previous month.
Although the index remained above the growth threshold of 50 points, it fell to its lowest level in the last 9 months.
While the lowest employment growth was recorded in the services sector since January, the business confidence subindex fell to the lowest level in the last 10 months.
While there was a limited increase in overall demand for services in September, the number of start-ups was at its lowest level of the year.
The index, which was below 50 in the last 4 months of 2022 due to the effect of Covid-19 restrictions, again exceeded the growth threshold with 52.9 in January this year, 55 in February, 57, 8 in March, 56.4 in April, 57.1. in May and June, continuing its expansionary trend with 53.9, 54.1 in July and 51.8 in August.
The index, compiled from the results of surveys sent by market data services company IHS Markit to purchasing directors of more than 400 companies operating in the services sector in China, is considered a barometer of activity economic in the sector.
INCREASE EXPECTATION OF TOURISM INCOME
On the other hand, in China, the increase in tourism income during the long holiday period, which coincides with the National Day Week celebrating the 74th anniversary of the founding of the People’s Republic and the traditional Mid-Autumn Festival celebrated according to the lunar calendar, is expected to revitalize the sector.
China’s Ministry of Culture and Tourism reported that 896 million tourists are expected to travel within the country during the 10-day holiday period that began on September 29. This means that the number of tourists will increase by 86 percent compared to last year, when travel restrictions were imposed due to the Covid-19 pandemic.
The ministry predicts that domestic tourism revenue during the holiday will increase by 138 percent compared to last year, reaching 782.5 billion yuan (about 109 billion U.S. dollars). If expectations come true, the highest revenue will be achieved during the National Day Week holiday since 2018.
According to data from China’s popular hotel booking platform Fliggy, the number of domestic and international hotel reservations made during the holiday period increased six times compared to the National Day and Mid-Autumn Festival holiday periods in last year.
Meituan-Dianping platforms, which are used for restaurants, entertainment venues and tourism event bookings, also announced that tourism event bookings increased by 2 times compared to the pre-Covid-19 period, and restaurant bookings increased by 112 percent.
THE RECOVERY IS FRAGILE IN THE MANUFACTURING SECTOR
On the other hand, although Caixin’s manufacturing PMI index remained above the growth threshold at 50.6 in September, it decreased compared to last month.
The index rose to 51 in August, surpassing the growth threshold for the first time since February.
The official manufacturing PMI index, announced by the National Statistics Office (UIB) on September 30, rose to 50.2 and exceeded the growth threshold for the first time since March.
The UİB non-manufacturing PMI index increased by 0.7 to 51.7, correcting the downward trend of the last five months. (AA)