BEIJING, April 6 (Reuters) - China's services activity
in March revved up at the quickest pace in 2-1/2 years on robust
new orders and job creation and a consumption-led post-COVID
recovery, a private-sector survey showed on Thursday.
The Caixin/S&P Global services purchasing managers' index
(PMI) rose to 57.8 in March from 55.0 in February, the third
consecutive monthly expansion after the government dropped
stringent anti-virus curbs late last year. It was the highest
reading since November 2020.
The 50-point mark separates expansion and contraction in
activity on a monthly basis.
The upbeat figure echoed an official PMI released last week,
which shot to the highest level in more than a decade.
Thanks to improvements in customer demand, the rate of new
orders was the sharpest since November 2020, the Caixin survey
showed. Notably, new export orders in the services sector grew
at the fastest pace on record.
As firms took on additional workers to satisfy the growing
business demand, the rate of job creation was the fastest in 28
months.
However, business confidence across the sector dropped to a
three-month low.
Rising labour and raw material costs pushed up input prices
at the end of the first quarter. Firms also attached greater
amounts of incoming new work and subsequent pressure on capacity
with backlogs of work.
"Bookings have recovered 70-80% to pre-COVID level and are
not as good as I had expected," said a man surnamed Yang, who
runs a home stay business in southeastern Xiamen, Fujian
province.
"Neither the economy nor household consumption has fully
recovered," Yang added.
Some economists doubted whether the stellar economic
recovery can last long amid rising geopolitical tensions and
financial concerns? outside China.
Julian Evans-Pritchard, head of China economics at Capital
Economics, said in a note that recent data suggests the consumer
recovery remained uneven in March and may have lost some
momentum, citing weak car sales.
"But the general picture seems to be that while consumers
have been quick to return to the streets and public transit,
they have been slower to step up discretionary spending on big
ticket items or long-distance travel," Evans-Pritchard said.
Caixin/S&P's composite PMI, which includes both
manufacturing and services activity, rose to 54.5 in March from
54.2 a month prior, marking the quickest expansion since June.
(Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)
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