China services activity grows for first time in 5 months

China's services activity increased for the first time in five months in January as demand and supply picked up on the implementation of optimized COVID 19 control measures, a private survey showed on Friday.

Media group Caixin said in a report, the Caixin China General Services Purchasing Managers' Index rose to 52.9 in January after 48 in December, above the 50 point mark that separates growth from contraction.

As demand and supply expanded, services activity experienced a boom, said Wang Zhe, senior economist at Caixin Insight Group. Although COVID infections remained high, an easing of related containment measures stimulated supply and demand in the sector. The report said companies often linked the expansion in activity to COVID containment measures and a recovery in customer demand.

Business activity and total new business came in above 50 in January, marking the end of a four month contraction. The report said that travel restrictions boosted services exports with the sub-index for new export orders climbing into expansionary territory.

Business confidence strengthened during the month, as Optimized COVID 19 containment measures are widely expected to boost activity over the next year and the level of business optimism rose to its highest since February 2011.

The report said that the composite PMI of Caixin, which includes both manufacturing and services activity, increased to 51.1 from 48.3 in December.