By Doris Yu
Investing.com – A private survey on Monday showed China’s service sectors, a 14-month low, due to a new wave of COVID-19 cases in Guangdong province. He indicated that the economic recovery of the world’s second-largest economy could begin to slow down.
Data released earlier in the day said June was at 50.3, the lowest since April 2020. It was lower than May’s 55.1 figure, but remained above the 50 mark, indicating growth.
Meanwhile, in June, released Thursday, it stood at 51.3, down from the 51.8 forecast by Investing.com and the May 52 reading.
The slowdown in the manufacturing and services sectors indicated that demand may have peaked and China’s economic recovery from COVID-19 is beginning to moderate, analysts told Reuters.
Although China’s service sector recovered more slowly than the manufacturing sector, it had been driven by a gradual improvement in consumption in previous months.
However, a COVID-19 outbreak in Guangdong province since late May and subsequent restrictions on the spread of COVID-19 affected business and consumer activity.
Although the government took immediate action to curb the spread of COVID-19, the Caixin survey indicated that the business outlook for service providers for the coming year declined to the lowest level in nine months.
“The manufacturing industry has returned to normal after the epidemic, while the service industry remains sensitive to regional revivals,” Wang Zhe, senior economist at Caixin Insight Group, told Reuters. “Furthermore, last year’s low base effect will continue to weaken in the second half of this year. Inflationary pressure, intertwined with the economic slowdown, will continue to be a serious challenge.”
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