ACTIVITY in China’s services sector in February expanded at the slowest pace in six months, a survey showed Thursday.

The Caixin/Markit services Purchasing Managers’ Index (PMI) dropped to 50.2 in February — the lowest since August and only a touch above the 50-point mark that separates growth from contraction on a monthly basis — from 51.4 in January.

A sub-index for new business in the private survey stood at 48.8 in February, the first decline since August last year, as services firms reported measures to contain COVID cases, including the travel restrictions, impacted client demand.

New export business fell for the second straight month, although at a slower pace.

That led to another reduction of payrolls at services firms, but the extent of decline eased.

“Demand for services contracted, while supply expanded at a limited pace. The spread of COVID-19 in some regions hurt business operations of services companies,” said Wang Zhe, senior economist at Caixin Insight Group.

The survey also showed inflationary pressures eased a bit. A sub-index for input costs stood at 52.5, compared with 54.5 the previous month, although it marked the 20-month of growth.

Confidence towards the year ahead, however, picked up to a three-month high as firms expect a strong post-pandemic recovery. (SD-Agencies)