A Meituan food courier hands a bag of food to a resident of a closed neighborhood due to the recent outbreak of COVID-19 on August 11, 2021 in Zhangjiajie, Hunan Province, China.
Yang Huafeng | China News Service Getty Images
BEIJING – China’s service industry contracted in August for the first time since the pandemic peaked early last year, according to official data released on Tuesday.
The monthly survey of companies by the National Bureau of Statistics found that the index of non-manufacturing purchasing managers (PMIs) fell to 47.5 in August, below 53.3 in July.
The latest reading also marked the first drop below line 50 since February 2020, when China closed more than half of the country in an effort to contain the coronavirus. Readings below 50 indicate a contraction in previous month’s business activity, while readings above 50 reflect expansion.
The fall in PMI services this month comes as the spread of the highly infectious delta variant in late July and August prompted Beijing and many other major cities to announce travel restrictions and blockades in some apartment communities.
Last week, daily reports of new cases of national transmission had been reduced to zero and the National Health Commission said the risk of a national outbreak had been limited.
The official manufacturing PMI showed that the activity of the companies expanded for the 18th consecutive month in August, to 50.1. This was slightly below the 50.2 level predicted by a Reuters poll.
China was the first major economy to contain the coronavirus pandemic last year. However, retail sales have lagged behind in the global recovery and fell short of expectations in July amid uncertainty over new regulation and employment prospects.