By Ambar Warrick
Investing.com -- Chinese services sector activity rose more than expected in February, a private survey showed on Friday, as an economic recovery in the country gathered steam after the lifting of most anti-COVID restrictions earlier this year.
The Caixin services purchasing managers’ index (PMI) rose 55 in February, beating expectations for a rise of 54.7 and higher than the prior month’s reading of 52.9. Growth was also at its fastest pace in seven months.
The reading comes on the heels of stronger-than-expected government data, which also painted a positive picture of the world’s largest economy, as it recovers from three years of COVID restrictions.
China’s composite PMI advanced at its fastest pace in over a decade in February.
The Caixin survey, which focuses on smaller, private companies, showed that companies largely benefited from the easing of pandemic-era restrictions and fewer disruptions in activity. Demand for services was also seen improving during the month.
Firms saw higher customer numbers and export orders during the month, with most Chinese firms also growing much more optimistic over an economic recovery this year.
“There was still a lot of optimism in the services sector in February as business owners continued to express great confidence in an economic recovery upon the easing of COVID controls,” Wang Zhe, Senior Economist at Caixin Insight Group said in a note.
The strong Caixin data, coupled with positive government readings earlier this week indicate that the Chinese economy is on a steady path to recovery after the easing of most anti-COVID restrictions.
Rising infection rates in the country also appear to have had minimal impact on business activity, with government officials recently declaring a “decisive victory” over COVID.
Increased government spending, coupled with accommodative monetary policy also appeared to be benefiting local business activity. The People's Bank of China recently held interest rates at record lows, and is expected to keep them there in the near term.
The strong PMI readings also set a positive tone ahead of a high-level government meeting, which begins on Saturday.