2022-04-06 04:30:01 $ECON Economic Data
04/06/22 04/0604:30 04/06/2204:30 | China: Covid hits spendingChina: Covid hits spending. While many countries have lifted Covid restrictions after the vaccination campaigns over the past year, China's zero Covid policy is increasingly reflected in economic data, most notably spending. Caixin PMI reports for March looked pretty dismal and signalled contraction across manufacturing as well as services sectors. The Caixin General Services PMI plunged to 42.0 from 50.2 in February, signaling the sharpest rate of decline since early 2020 when Covid first hit. Companies highlighted "pandemic related restrictions, notably those on mobility" exports decline and staffing levels dropped. The survey also signaled a further increase in the level of outstanding business at services providers, which highlights that once Covid-measures are lifted activity should bounce back relatively quickly and indeed, companies remained generally upbeat about the outlook. Still, the report noted that the "degree of optimism slipped to its lowest for 19 months", with the war in Ukraine starting to creep into the considerations. The Manufacturing PMI had also been in contraction territory in March, again largely due to virus measures. The no-Covid policy proves to be increasingly costly. |
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