BEIJING: China's services activity declined once again in October as coronavirus containment measures hurt businesses and consumer spending, according to a private sector business survey released on Thursday, overshadowing the country's economic recovery from the previous quarter. .

The Caixin Services Purchasing Managers' Index (PMI) declined last month to 48.4 from 49.3 in September as a result of a rise in virus cases, worsening disruptions and eroding consumer confidence. This is the lowest reading since May. On a monthly basis, the 50-point distinguishes between contraction and expansion.

An official survey released on Monday also showed that service activity, which relies more on personal interactions, expanded from September to contract in October.

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China's economy is once again having trouble gaining traction due to persistent antivirus measures, a protracted asset sector woes, and rising risks of a global recession after the third quarter, which saw better-than-expected growth.

Despite the week-long National Day holiday earlier in the month, survey participants reported a decline in new business for the second consecutive month in October.

From last year's holiday season, fewer tourists traveled, and domestic tourism revenue decreased by 26.2%. A commerce ministry spokesman said last week that the coronavirus outbreak is putting pressure on services, including retail, housing and catering industries.

The indicator of new export orders also changed from expansion to contraction from the previous month.

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Surprisingly, the survey revealed that the increase in employment in the service sector has resulted from initiatives to increase sales potential and increase employee capacity.

The employment sub-index reached its highest level since May 2021 and ended a series of job losses that began in early 2022.

The firms surveyed maintained a positive outlook for business activity over the next 12 months, despite recovering from a six-month low in September.

However, the degree of optimism was still well below the long-term average due to the ongoing virus outbreak and concerns about the prospect of a global recession.

According to Wang Zhe, an economist at Caixin Insight Group, "the negative impact of COVID containment on the economy remained, and the economy was under increasing downward pressure."

China's harsh response to the outbreaks is having a negative impact on the economy and is causing electric vehicle maker Nio to temporarily shut down production at its factories in the eastern city of Hefei and Shanghai's Disney Resort.

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The manufacturing and services component of Caixin's overall PMI declined to 48.3 from 48.5 in October, the lowest reading since May.

S&P Global compiles the Caixin PMI based on responses to inquiries sent to Chinese procurement managers.