China’s services activity decelerates in May

China had seen a deceleration in its May factory activity, a private survey showed on Thursday. The decline was mainly attributed to dwindling overseas demand and surging costs, which brought in pressures for the country’s businesses.

The Caixin/Markit services Purchasing Managers’ Index (PMI) was read at 55.1 in May, a figure lower than the 56.1 reading seen in April. While there was a contraction, the index still stood above the 50 threshold that separates growth from decline.

The deceleration was owed mainly to a decline in overseas demand as the coronavirus crisis ravaged business activity. While the services sector lagged behind the manufacturing industry in terms of recovery, a minimal rebound in consumption still supported the country.