BEIJING, May 5 (Reuters) - China's service activity grew
for a fourth straight month in April, a private-sector survey
showed on Friday, as businesses continued to benefit from a
return toward pre-pandemic levels of demand and output, although
expansion slowed slightly.
The Caixin/S&P Global services purchasing managers' index
(PMI) fell to 56.4 in April from 57.8 the month prior, above the
50-point mark that separates expansion and contraction in
activity on a monthly basis.
The figure echoed the official PMI released on Sunday, which
showed a slightly slower pace of growth.
China's economy grew at a faster-than-expected pace in the
first quarter, as businesses and consumers shook off the chill
of strict COVID curbs that were lifted in December.
The world's second-biggest economy is facing an uneven
recovery and some persistent headwinds, with strong activity in
services and a contraction in manufacturing.
China's tourism rebounded to pre-COVID levels in the
five-day May Day holidays as domestic travel rose by more than
two-thirds from a year earlier, government data showed.
"It remains to be seen if the economic rebound is
sustainable after a short-term release of pent-up demand, with a
number of indicators flagging that the recovery has yet to find
a stable footing," said Wang Zhe, senior economist at Caixin
Insight Group.
Surveyed services firms' production activity and new orders
including new export order expanded for the fourth consecutive
month in April.
Caixin group attributed the rise in activity to the return
to more normal operating conditions as the impact of COVID-19
continued to fade.
Services companies' operating expenses rose to a
12-month-high, driven by higher staffing costs and greater
prices for raw materials. However, efforts to attract new orders
have limited companies' ability to pass on rising costs to
customers.
"In the future, relevant policies should focus on expanding
domestic demand, stabilising employment and improving
expectations, as well as improving the monetary transmission
mechanism and creating a virtuous circle of economic
development," said Wang.
China will maintain support for the economy, focusing on
domestic demand, which remains inadequate, the Politburo, a top
decision-making body of the ruling Communist Party, said last
week.
Caixin/S&P's composite PMI, which includes both
manufacturing and services activity, fell to 53.6 from 54.5 in
March, marking the fourth straight month expansion.
(Reporting by Liangping Gao and Ryan Woo; Editing by Sam
Holmes)
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