The Caixin China service purchasing managers’ index rose to 58.4 in June from 55.0 in May, Caixin Media Co. and research firm Markit announced on Friday. The reading arrived well above the 50 mark that separates expansion from contraction, signaling rapid month-to-month expansion.
Total new business increased at the highest rate since August 2010, with service providers anticipating a further increase in customer demand in the coming months, according to Caixin.
Both domestic and foreign supply and demand have recovered, as the coronavirus crisis has remained largely under control in China, said Wang Zhe, senior economist at the Caixin Insight Group. Employment was still a key problem and it will take time for the economy to fully recover, said the economist.
Although the supply and demand for services recovered, the sub-index measuring hiring in the sector remained in negative territory for the fifth consecutive month in June, as companies remained cautious about the expansion of hiring in a context insufficient demand.
China’s official non-manufacturing purchasing managers’ index, which covers services and construction, hit a seven-month high at 54.4 in June, up from 53.6 in May, said the National Bureau of statistics earlier this week.
The Caixin PMI is more oriented towards small businesses while the official one is more oriented towards larger ones.