Two key sectors add more payrolls in Sept
Increase in employment opportunities points to healthy economic rebound
China’s services and manufacturing sectors added payrolls last month, the first time since the COVID-19 epidemic, an indication that the country’s economic rebound has gained momentum, a private survey showed on Friday.
Services companies increased their staffing level for the second straight month to meet rising market orders in September, while the manufacturing sector broke an eight-month streak of contraction in employment, according to a survey released by private media group Caixin.
“Employment in the manufacturing and services sectors improved simultaneously for the first time after the COVID-19 outbreak, though the improvements were not strong,” said Wang Zhe, a senior economist at Caixin Insight Group.
The improvement in the employment situation has been encouraging as it signals an improvement in the overall living conditions as well as future recovery in consumption and is a reflection of the continuous recovery in market demand, experts said.
“Supply and demand were strong for both the manufacturing and services sectors last month, with demand expanding at a faster pace than a month earlier,” Wang said, adding that new orders received by services companies expanded for the fifth month in a row.
Driven by stronger domestic demand, the services sector witnessed steady recovery, the report said, with the Caixin China General Services Purchasing Managers’ Index, which gauges health of the sector, coming in at 54.8 in September, compared with 54 in August.
A reading above 50 indicates expansion, while one below reflects contraction.
The reading was the highest in the last three months and among the quickest recorded over the past decade, said the report.
Business sentiment across the sector brightened, as the sub-gauge of business expectations climbed with respondents having a positive view about future economic recovery and effective epidemic control domestically.
Official figures also pointed to a strong economic recovery, as the composite PMI, covering the manufacturing and non-manufacturing sectors, rose to 55.1 last month from 54.5 in August, the National Bureau of Statistics said earlier.
Experts said the Chinese economy may have grown by more than 5 percent on a yearly basis during the July-September period, up from 3.2 percent in the second quarter, while the growth rate may further accelerate in the last three months of the year.
Wu Chaoming, deputy dean of the Chasing Institute under the aegis of Chasing Securities, said he estimates an around 5.4 percent economic growth for the third quarter and an about 6 percent for the last one, thanks to the recovery in domestic investment and consumption.
The services sector may see a steady recovery as the year-end consumption peak falls in the last quarter while effective epidemic control and stimulus measures have cemented domestic consumers’ willingness toward face-to-face activities, Wu said.
Yet, uncertainties over the epidemic and dampened household income prospects may still restrict the speed of growth in the sector, Wu said.
Experts also cautioned against key downside risks ranging from a resurgence of COVID-19 domestically to a sluggish external demand.
New export orders for the services sector have shrunk for three consecutive months as of September, and the contraction has deepened from a month earlier, according to the Caixin survey.
Also, the employment situation has not fully stabilized. While the Caixin survey indicates a slight expansion in employment across the economy, the employment subindexes from the NBS remained in the contraction territory last month.
Li Qilin, chief economist with Yuekai Securities, said the policies to stabilize employment and safeguard market entities should maintain their strength in the short term, while doubts remain over whether the improvement in employment and prospects for small businesses could be sustained.
Stabilizing employment has been ranked as the top priority for policymakers this year, followed by other key targets like safeguarding basic livelihoods and the survival of businesses.