China's services activity slumped to 6-month low

Growth in China's services industry fell in November to a six-month low. New strict lockdown measures aimed at fighting COVID-19 outbreak in China affected consumer demand. These factors indicate that economic growth is slowing. 

The Caixin/S&P Global services purchasing managers' index (PMI) was down to 46.7 in November from October’s 48.4. The index remains in contraction for the third straight month.

Wang Zhe, senior economist at Caixin Insight Group highlighted that the outbreaks that had been reported since October hit China’s economy hard.  As a consequence, the authorities again have to solve the problem of balancing the Covid Zero strategy and the need for economic growth.

Surveyed firms reported the biggest output and new work drop for six months. They continued to downsize as confidence in the outlook for the next 12 months declined to an eight-month low.

The pace of job cuts was the quickest since November 2005, marking growing tension in the labor market.

Companies are rushing to increase prices amid easing input cost inflation.

The composite PMI made using both manufacturing PMI and services PMI slipped to 47.0 in November from 48.3.