China services sector growth hits 3-month low in January ahead of coronavirus impact

BEIJING - Growth in China's services sector slowed for a second straight month in January, a traditionally busy sales season, hitting a three-month low as companies cut prices and new orders dipped, a private sector survey showed on Wednesday .

"China's economic recovery was not strong enough due to limited improvement in demand, and some companies didn't replenish inventories," Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, wrote in a note accompanying the Caixin PMI release. The pace of job creation almost stalled, with the employment sub-index hitting the lowest level in 16 months. Meanwhile, firms had to lower their selling prices for the second time, squeezing companies' profit margins.

Analysts have noted the deepening coronavirus crisis, which is expected to be as much as two or three times worse than the Sars outbreak, will potentially add to industry headaches.

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