A private sector survey on Monday showed growth in China’s services activity slowed slightly on rising costs, but new order growth accelerated and business confidence remained solid, boosting hopes for a sustained economic recovery. Rose.
“The strong start to the year is consistent with Caixin’s manufacturing and services PMI, which has been in expansion territory for several consecutive months,” said Wang Zhe, senior economist at Caixin Insight Group.
Overall new business value reached its highest level since May last year, while improving overseas demand and increased tourism activity pushed new export orders growth to the fastest pace in 10 months.
This has lifted Chinese service provider business confidence over the next 12 months to its highest level this year.
Businesses continue to face some cost pressure from rising input prices for materials, labor, and energy, but the rate of increase remains below the long-term survey average.
As a result, companies have been reluctant to fill vacancies created by retirements while raising the prices they charge customers.
“We need to implement early policies effectively and quickly, and make consistent efforts to maintain the current economic recovery momentum and ultimately improve overall market expectations,” Wang said. .
The Caixin/S&P composite PMI, which tracks both the services and manufacturing sectors, stood at 52.8 last month, up from 52.7 in March and the fastest pace for 2023 since May.
China’s economy is struggling to make a solid post-COVID-19 recovery, mainly due to the knock-on effects on confidence and demand from the prolonged real estate sector crisis.
While some positive results in the first-quarter gross domestic product (GDP) report provide hope for a steady recovery through the rest of the year, economists say a strong recovery is still a long way off. This is the common understanding.
Investors and analysts said China’s structural reform efforts must proceed in parallel with greater stimulus to foster a stronger and more sustainable economic recovery.
