China Service Sector Growth Improves In December

China’s services activity growth improved at the end of the year with firms posting faster increase in new work, survey results from IHS Markit showed on Thursday.

The Caixin services Purchasing Managers’ Index rose to 53.1 in December from 52.1 in November.

A reading above 50.0 indicates expansion in the sector. Output increased in each of the past four months.

Total intakes of new business increased for the fourth successive month in December. Moreover, the pace of growth quickened from November’s three-month low. Services companies also registered a further increase in new orders from abroad.

Chinese service sector employment improved for the fourth month running underpinned by improved demand conditions and efforts to lift operational capacity.

Although staff numbers increased, backlogs of work expanded for the fifth time in the past six months in December.

On the price front, the survey showed that average input costs increased in the final month of 2021. Nonetheless, the rate of inflation softened since November.

At the same time, charges set by services companies rose only moderately, with the rate of inflation edging down to a four-month low.

Although Chinese service providers remained highly upbeat regarding the 12-month outlook for business activity, overall sentiment softened since November.

At 53.0 in December, the composite output index rose from a three-month low of 51.2 in November. Output has now risen in each of the past four months, with the latest increase the quickest since July.