Chinese services firms post strongest growth in a decade as recovery picks up – business live

Chinese services firms post strongest growth in a decade as recovery picks up – business live

Economist and investors are cautiously welcoming the jump in China's services PMI in June:

Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank

On the data deck, the Caixin services PMI pointed at the fastest expansion in a decade as the emerging market giant accelerated the pace of economic activity to tackle the Covid-led slowdown.The second wave worries didn't have a material impact on PMI figures, which was very good news for investors.

Nomura's analyst team:

"This suggests the services sector's recovery is gaining traction.

However, we caution that the recovery momentum could lose some steam in coming months.“

Jim Reid of Deutsche Bank:

The problem with PMIs is that they simply measure changes in activity versus the previous month, so can prove rather volatile when you have the sort of economic dislocation we've seen since the shutdowns.

Updated

at 2.58am EDT

2.52am EDT02:52

Growth across the wider Chinese economy has also hit a 10-year high, as new business accelerates.

With service sector firms and manufacturers both reporting growth, the China Composite PMI has hit its highest level since November 2010.

China composite PMI to June 2020 Photograph: Caixin

Importantly, though, that doesn't mean companies have recovered to their pre-crisis levels. Just that, after a severe economic shock, things are improving.

2.37am EDT02:37

Introduction: China's service sector bounces