BEIJING (Reuters – China’s services sector grew slower in November, amid increasing inflationary pressures. Also, small-scale COVID-19 attacks are continuing. This was revealed by a private survey on Friday.

Caixin/Markit’s Purchasing Managers’ Indice (PMI), which measures growth and contraction, fell to 52.1 in Nov from 53.8 in Oct.

Both the readings from the private survey which is more focused on coastal firms, and those from the official survey which also shows that the growth of the services sector has slowed down, were comparable.

Analysts claim that services, which took longer to recover than manufacturing from the pandemic, are more susceptible to anti-virus and sporadic COVID-19 infections. These factors could cloud the future prospects of a significant rebound in consumption.

China’s tourism and leisure industries have felt the heat of the zero tolerance COVID-19 policy to control infections. The country currently faces a small outbreak of the disease in Inner Mongolia.

Input prices for firms increased by 17.5% in the last month, the highest rate since May because of rising labor and raw materials costs. The prices charged rose also, though at a slower rate, which is indicative of margin pressures.

The sub-index that measures new business increased was at its slowest rate since August. However, business expectations have improved over the previous month.

Caixin’s November composite PMI (which incorporates both manufacturing and service activity), fell to 51.2 from 51.5 last month.

Policymakers need to continue to support small and medium-sized enterprises. Senior economist for Caixin Insight Group Wang Zhe said that they should pay more attention to issues such as declining job prospects, weak household income growth and low consumer purchasing power.

“Enterprises still face high costs pressures. Inflation should be taken seriously by policymakers.