China’s non-manufacturing sector activity expanded at a faster pace in September, buoyed by an improvement in business expectations, but firms still face challenges due to the COVID-19 pandemic and the property market downturn.
The official non-manufacturing purchasing managers’ index (PMI) rose to 53.7 in September from 52.6 in August, according to data from the National Bureau of Statistics (NBS) released on Saturday.
The gauge is based on a 100-point scale, with readings above 50 indicating expansion and those below 50 signaling contraction.
The sub-index for business expectations jumped to 60.1 from 54.1 in August, the highest level since June 2021, indicating that firms are more optimistic about the future.
The sub-index for new orders also rose, to 54.1 from 52.8, suggesting that demand for services is picking up.
However, some sub-indices remained in contractionary territory, indicating that challenges remain.
The sub-index for employment fell to 49.7 from 49.9, signaling that the services sector is still shedding jobs.
The sub-index for supplier delivery times also fell, to 45.2 from 45.9, indicating that supply chain disruptions are persisting.
Zhao Qinghe, a senior statistician at the NBS, said that the services sector is still facing challenges, including the COVID-19 pandemic, the property market downturn, and rising costs.
Zhao said that the government will continue to implement policies to support the services sector, including tax cuts and fee reductions, and will encourage innovation and entrepreneurship.
The services sector accounts for about 53% of China’s GDP and is a major source of employment. The improvement in the PMI is a positive sign for the Chinese economy, but challenges remain.
The COVID-19 pandemic has led to lockdowns and travel restrictions, which have weighed on the services sector. The property market downturn has also had a negative impact, as it has reduced demand for services such as real estate brokerage and home decoration.
Rising costs are another challenge for the services sector. The prices of raw materials and labor have been rising, which has squeezed profit margins for firms.
Despite the challenges, the government is committed to supporting the services sector. The government has implemented a series of policies to boost the sector, including tax cuts and fee reductions. The government has also encouraged innovation and entrepreneurship.
The improvement in the PMI is a positive sign for the Chinese economy, but challenges remain. The government will continue to implement policies to support the services sector and promote economic growth..
