31.03.202305:37:00UTC+00China Services Activity Growth Strongest In 12 Years

China's service sector activity expanded at the fastest pace in twelve years in March following the lifting of pandemic related restrictions last year but manufacturing activity posted a slower growth, survey results from the National Bureau of Statistics showed Friday.

The non-manufacturing Purchasing Managers' Index, which takes into account the business conditions in services and construction, unexpectedly advanced to 58.2 in March from 56.3 in February.

A score above 50.0 indicates expansion in the sector. Moreover, the latest reading was the highest since 2011. The expected score was 54.3.

By contrast, the manufacturing PMI fell to 51.9 in March from 52.6 in the previous month. However, the reading was moderately above economists' forecast of 51.5.

The composite output index, which covers both manufacturing and services activity improved to 57.0 from 56.4 a month ago.

Although the weak global backdrop weighed on manufacturing activity, services continued to benefit from a resurgence in consumer spending and construction was buoyed by fiscal support, Capital Economics' economist Julian Evans-Pritchard said. But the economist cautioned that this strength would not be sustained indefinitely.

"With much of the immediate boost from dismantling virus restrictions now already passed and policy set to turn less accommodative, the recovery is likely to moderate over the coming months," the economist added.