The increase in activity in the services sector of China in January slowed to the lowest in three months

the Growth of business activity in the services sector of China in January slowed for a second month in a row and was the weakest in three months, according to the Caixin Media Co. and IHS research company Markit.

the Index of purchasing managers (Purchasing Managers Index, PMI) in the services sector of China last month, down from the December level of 52.5 to 51.8 points.

a reading below 50 points reflect reducing activity, a higher activity.

“the Recovery of China’s economy was not strong enough due to improved demand, and some companies do not restock,” said Director of macroeconomic analysis CEBM Group Zhong Zheng Sheng.

New orders in January rose at the weakest rate since last October. This is partly due to slower domestic demand growth, while growth in new export orders accelerated.

the Company noted a steady increase in operating expenses, and their efforts to contain costs have put pressure on employment in the service sector. Job creation almost stopped, while the employment sub-index reached the lowest level in 16 months. Companies have had to reduce selling prices, which negatively affect profits.

However, service providers generally expect business activity in the coming year will continue to grow. The level of optimism among companies in the sector was the highest in 16 months.

the Results of a private survey contrast with official data earlier this week showed that growth in activity in the services industry accelerated in January. The official PMI non-manufacturing sector rose to 54.1 from 53.5 points in December.

the Official PMI covers more large companies and state enterprises, while the Caixin study covers a larger number of small and medium companies.

while a trade agreement the first phase between the U.S. and China eased the pressure on exporters, the outbreak of the coronavirus poses a threat to growthas the second largest economy in the world.

to curb the spread of the virus, Chinese authorities have imposed transport restrictions and strict public health measures that greatly affect the transport and tourism sectors as well as retail trade.

“Because the current epidemic of pneumonia puts pressure on the economy, the authorities need to make efforts to prevent a major break in the confidence-building business,” said Zhong.

Consolidated Caixin PMI, covering both manufacturing and non-manufacturing sectors in January fell from December’s level of 52.6 to 51.9.