China Services Activity Growth Weakest Since 2024

(RTTNews) - China's services activity expanded at the weakest pace since September 2024 as new business moderated for the second month and optimism eased to the lowest in more than six years, survey data from S&P Global showed Wednesday.

The headline RatingDog China services Purchasing Managers' Index fell to 50.4 in July from 54.1 in June. Nonetheless, a score above 50.0 indicates expansion.

Activity expanded every month since January 2023 but the score signalled the weakest growth since September 2024.

New business expanded in July, extending the current sequence of increase to just over three-and-a-half years. Services exports remained strong on higher overseas demand to exhibitions, study tours, increased settlement business and effective management.

Despite the slowdown in new order growth, service providers continued to expand their workforces. Employment in the services sector grew for the third straight month. With sustained workforce growth, outstanding business grew at a slower pace.

Business confidence regarding the twelve-month outlook remained positive but the level reached the softest since February 2020.

Regarding prices, the survey showed that inflationary pressures eased further. Input price inflation softened from May's 19-month high to the weakest since January.

Meanwhile, service providers raised their output charges, marking the first back-to-back price rise for a year-and-a-half.

"The Services PMI is expected to remain in expansionary territory in the near term, though the pace of recovery will depend on the strength of domestic demand and business confidence," RatingDog Founder Yao Yu said.

The overall private sector growth hit the slowest in a year, reflecting softer gains in both manufacturing and services. The composite output index fell to 50.8 in July from 53.6 in June.