The business activity index, which reflects the overall operating conditions of the non-manufacturing sector, has stayed above 53% for two consecutive months, showing a steady recovery of the business activities of the non-manufacturing sector, official data showed on Sunday.
A reading above 50 indicates expansion, while a reading below it reflects contraction.
China’s non-manufacturing business activity index fell 0.9 percentage points from the previous month to 53.8% in July, the second-highest reading of the year, according to the data released by the China Federation of Logistics and Purchasing (CFLP) and the Service Survey Center under the National Bureau of Statistics (NBS) on Sunday.
The contact-based service industry is recovering as the impact of the pandemic continues to wane, according to the NBS. The business activity index in the catering industry remained above 60 percent as residents resumed their daily social activities gradually.
“The business activity index of the service sector continued to increase in July. Driven by a series of preferential policy measures to stabilize growth and promote consumption, as well as the consumption boom in summer, the service sector has registered a recovery growth for two consecutive months,” said Shi Zhaohui, director of the Division of Business Tendency Survey of the Service Survey Center under the National Bureau of Statistics.
The expansion of the construction sector accelerated in July, with the sub-index for business activities in the sector standing at 59.2, up 2.6 percentage points from the previous month and being the highest level of this year.
The supply and demand of the construction sector continued to rise in July, indicating that the investment activities continued to improve.
Experts said that in the second half of the year, investment will remain an important element to stabilize growth with the support of special bond funds and credit funds.
“Since the beginning of this year, infrastructure construction has become an important driving force for China’s economic growth. In particular, government special bonds played a key role in boosting investment. In terms of the investment direction, new infrastructure and high-tech industries are still the main areas of special bonds,” said Xu Donghua, an official of the State-owned Assets Supervision and Administration Commission of the State Council.
Sunday’s data also showed that the PMI for the manufacturing sector came in at 49 in July, edging down from 50.2 in June.
