BEIJING (REUTERS) – China’s service\u00a0sector expansion slowed last month, a private sector survey showed on Thursday (June 3), with weaker overseas demand and increased costs putting pressure on businesses.<\/p>\n
The Caixin\/Markit service\u00a0Purchasing Managers’ Index (PMI) fell to 55.1 last month, down from 56.3 in April but still well in expansionary territory. The 50-mark separates growth from contraction on a monthly basis.<\/p>\n
The survey attributed part of the slowing expansion to a fall in overseas demand as Covid-19 cases abroad hurt business activity. A gauge of export orders slipped into contraction.<\/p>\n
The Caixin PMI contrasts with an official survey released earlier this week, which showed activity in China’s service\u00a0sector expanded at a faster pace in May.<\/p>\n
Though slower to recover from the epidemic than manufacturing, a gradual improvement in consumption has stimulated activity in China’s service\u00a0sector, which includes many smaller and private companies.<\/p>\n
Growth in total new orders slipped and service\u00a0firms increased their staffing levels for the third straight month, but at a slower pace, the Caixin survey showed.<\/p>\n
Inflation pressures worsened, with input costs rising at a sharper rate last month\u00a0and reports of more expensive raw materials, energy, staff and transport, the survey found.<\/p>\n
Even though firms were able to raise selling prices for the 10th consecutive\u00a0month, the increases have yet to catch up with the inflation in input costs.<\/p>\n
“Service\u00a0supply and demand continued their upward trends for the 13th consecutive month, though both expanded at a slower pace than in the previous month,” said senior economist Wang Zhe, from Caixin Insight Group, in a statement accompanying the data release.<\/p>\n
“Inflationary pressure was enormous as price gauges continued to rise. Both the measures for input costs and the prices service providers charged rose to their highest points of the year.”<\/p>\n
The Caixin China General Composite PMI came in at 53.8 last month, down from 54.7 in April.<\/p>\n
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