China’s service sector shrank in August due to a virus outbreak, official statistics from the Bureau said on Tuesday.
The decline in the official non-manufacturing purchasing managers’ index, which measures the performance of the services and construction sectors, fell to 47.5 in August, from 53.3 a month ago. A reading below 50 indicates the contraction of the sector.
At the same time, the factory’s PMI reached 50.1, compared to 50.4 last month. The expected reading was 50.2.
The composite output index fell to 48.8 in August from around 52.4 in July.
“We do not think that the recent decline in PMI should be fully developed due to the temporary impact of the Delta wave,” said Capital Economics economists Julian Evans-Pritchard and Sheana Yue.
As a result, even when reviewing the volatility caused by the recent virus outbreak in China, economy it seems that after a period of out-of-trend production, it will return to earth, economists added.
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