By Gina Lee

Investing.com – China’s services sector activities grew faster in December thanks to rising demand and easing inflation. However, the market suffered from small-scale COVID-19 infections that continued to be present in the country.

China Caixin services purchasing managers’ index (PMI), which focuses on small companies in coastal regions, from 52.1 in November. 

According to some analysts, the recovery due to COVID-19 will be slowest in the services industry. The service sector is most susceptible to the COVID-19 epidemics and subsequent restrictive measures. Tourism and leisure businesses were particularly hard affected.

Since December 22, 2021, the has been locked down.

The Caixin survey also showed that though rising slower, companies’ input prices rose for the eighteenth month in a row. The fastest rate of employment growth since May was a sub-index.

Supply and demand have both increased. The market sentiment improved as new products helped boost business activity. Total new business also increased for the fourth consecutive month. In a note that was included with the data, Wang Zhe (Caixin Insight Group Senior Economist) stated that surveyed businesses were still concerned by disruptions caused sporadic COVID-19 flareups.

“Although the measure for business expectations remained in positive territory, it fell to the lowest since September 2020 and was remarkably lower than the long-term average.”

Data from earlier this week indicated that official data from the National Bureau of Statistics revealed that while December was, the data for January were released.