China’s service sector recovers on lower COVID-19 cases

China’s service sector recovered in September as COVID-19 infections in the eastern province of Jiangsu eased. However, the pandemic’s risk to the economy persists.

The Caixin services purchasing managers index (PMI) increased to 53.4 in September from August’s 46.7 reading. The Caixin survey, which focuses on the private sector, also breached the 50 mark, indicating growth.

Data from the National Bureau of Statistics also showed a 53.2 reading of non-manufacturing PMI. 

Caixin Insight Group senior economist Wang Zhe said the government should prioritize epidemic prevention and control, as well as supply-side pressure relief.

The recovery from COVID-19 has been slower in the services industry compared with the industrial sector. The pandemic’s blow on consumption and travel makes the service industry vulnerable to virus outbreaks.

Meanwhile, input costs jumped at a higher rate for 15 straight months. Rising labor, freight, and raw material prices contributed to these gains.