China’s services sector activity contracted at the quickest rate in two years last month as the increase in COVID-19 cases reduced mobility and dampened client demand, reports the South China Morning Post. The Caixin services purchasing managers’ index (PMI) dived to 42 in March from 50.2 in February, dropping below the 50-point mark that separates growth from contraction on a monthly basis. The reading indicates the sharpest activity decline since the initial onset of the pandemic in February 2020.
The survey, which focuses more on small firms in coastal regions, tallied with the gauge of an official survey, which also showed the deterioration in the services sector.
Analysts say contact-intensive services sectors such as transport, hotel and catering were hurt the most, clouding the outlook for a much anticipated rebound in consumption this year.