Despite a slight slowdown in its activity expansion, China’s services sector continues to show signs of growth. According to a private sector survey released on Monday, the Caixin/S&P Global services purchasing managers’ index (PMI) decreased to 52.5 from 52.7 in March, remaining in expansionary territory for the 16th consecutive month. The 50-mark separates expansion from contraction.
Despite this dip, new business hit its highest point since May of the previous year, with growth in new export orders being the fastest in 10 months, driven by better overseas demand and tourism activity. This also boosted business confidence among Chinese service providers, reaching the highest level of the year. However, companies continued to face cost pressures, primarily due to rising input prices for materials, labor, and energy.
To address these challenges, companies have increased the prices charged to their customers but were still reluctant to fill vacancies created by departures. The senior economist at Caixin Insight Group, Wang Zhe, emphasized the importance of ensuring effective and prompt implementation of earlier policies to maintain the current economic recovery momentum and improve overall market expectations.
The composite PMI, which tracks both services and manufacturing sectors, increased to 52.8 in the last month from 52.7 in March, the fastest pace since May 2023. While there are pockets of strength that have raised hopes for a steady recovery throughout the year
