China's service sector activity grew for the first time in five months in January, according to a report by S&P Global on Friday. The Business Activity Index rose from 48 in December to 52.9 in January. The Composite Output Index improved to 51.1 in January from 48.3 in December on the back of the strong service activity, which offset a further decline in manufacturing.
Companies in the service sector reported the first increase in new business in five months, with improved demand following the relaxation of COVID-19 measures. However, a rise in infections resulted in more employee absences, increasing backlogs. The rate of input cost inflation was also up for the first time in five months, although at a slow pace. Business optimism soared, rising to the highest level for nearly 12 years.
