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China services sector returns to growth in May

By Michele Maatouk

Date: Wednesday 03 Jun 2020

China services sector returns to growth in May

(Sharecast News) - China's services sector returned to growth in May for the first time since January, according to data released on Wednesday.
The Caixin/Markit services purchasing managers' index increased to 55.0 from 44.4 in April, marking the highest level since October 2010 and coming in comfortably above the 50 mark that separates contraction from growth. It was also above consensus expectations for a reading of 47.3.

The output and new orders components rose to their highest levels in a decade, boosted by solid domestic demand, while new export orders were sharply lower.

Pantheon Macroeconomics said the jump in Chinese services was due, but activity remains well below pre-Covid levels.

Analyst Miguel Chanco said: "Consensus looked low, considering the further relaxation of travel curbs and the lift provided by the extended May Day holiday. Moreover, a relatively strong print was due, as this gauge has lagged the official services measure, which has been hovering above the key 50 mark since March

"In the event, today's result even bettered our above-consensus forecast of 51.0. To be sure, the first plus-50 print after three straight months of hefty declines implies that the level of activity probably remains well below pre-Covid levels."

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