(Yicai Global) July 5 -- China's service sector expanded at the slowest pace in the past 14 months last month amid southern China's new Covid-19 outbreaks, according to a widely watched independent survey.

The Caixin services purchasing managers’ index fell to 50.3 in June from 55.1 in May, data released by financial media group Caixin showed today. A level above 50 indicates expansion.

The trend was in line with the figures published by the National Bureau of Statistics. The official service sector PMI fell to 52.3 in June from 54.3 a month earlier, according to the NBS.

Expansion continued and inflation pressures eased but the resurging Covid-19 pandemic in some Chinese regions hurt the service sector, said Wang Zhe, senior economist at Caixin Insight Group.

Inflation and economic downturn remain serious challenges in the second half as economic indicators no longer get a similarly big boost from last year's low base, said Wang.

Sub-Indexes

Sub-indexes in the service sector were also looking less impressive than before. New orders dropped to a 14-month low. Still, new export orders managed to increase slightly. Employment contracted amid weaker demand after three straight months of expansion.

Input prices fell sharply to a nine-month low from a record high in May as raw material and labor costs declined.

The service charge index moved into contraction territory after 10 months of climbing as firms cut their costs and arranged fewer business trips amid the pandemic.

The business confidence gauge fell to a nine-month low last month even though many companies said the Covid-19 pandemic should eventually be brought under control.

China's manufacturing sector was also growing slower. The Caixin manufacturing PMI declined to 51.3 in June from 52 in May.

The Caixin comprehensive PMI slid by 3.2 points to 50.6 last month, also hitting a 14-month low.

Editor: Emmi Laine, Xiao Yi