The Chinese language service sector sees accelerated progress and closes stellar November

© Reuters.

From Gina Lee

Investing.com – China’s service sector saw accelerated growth in November. New business grew the fastest in over a decade, pointing to a further recovery in consumer demand in the world’s second largest economy.

The November reading was previously 57.8, above 56.5 in Investing.com’s forecasts and the October 56.8 reading.

The survey also found that total new business in November 2010 reached its highest level since April 2010 and the new export business expanded for the first time in five months. Service companies hired more people at a much faster pace for the fourth consecutive year in November. Business confidence improved to its highest level in over nine and a half years.

The increased demand allowed companies to pass on some of their higher costs to customers by increasing production prices, with a sub-index for the calculated prices rising to its highest level since February 2010.

The poll also concludes an outstanding November for China. The PMI for services follows positive data released earlier this week. The score was 54.9 and the PMI was 52.1 and 56.4, respectively.

Although the data suggests that China’s macroeconomic recovery is becoming more balanced and broader, the challenges remain. Scattered COVID-19 cases reported in some parts of the country could dampen consumer activity. The increasing number of COVID-19 cases worldwide is also likely to dampen exports.

The Chinese economy is expected to grow by around 2% in 2020, the weakest number since 1976 but still ahead of projections for other major economies.

However, some investors are confident that the recovery will continue for a few more months.

“In summary, both manufacturing and services recovered faster as overseas demand continued to grow and employment improved significantly,” said Wang Zhe, senior economist at Caixin Insight Group, in a statement on the data release .

“We assume that the economic recovery will continue for a few months after the epidemic. At the same time, deciding how to gradually withdraw the easing policy launched during the epidemic requires careful planning, as uncertainties persist inside and outside of China, ”said Wang regarding crisis measures introduced earlier this year to support the economy during the epidemic Covid19 curfew were presented.

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