Key facts
- China's services sector growth slowed in July, reaching its slowest pace since September 2024.
- The RatingDog China General Services Purchasing Managers' Index (PMI) dropped to 50.4 in July from 54.1 in June.
- Growth in new business moderated, primarily due to weaker domestic demand.
- Services exports continued to grow for the third consecutive month.
- Employment in the services sector increased, but at a slower rate than the previous month.
- Business sentiment remained positive but declined to its lowest point since February 2020.
- The Composite Output Index, combining manufacturing and services, decreased to 50.8 from 53.6.
China's services sector experienced its slowest expansion in July since September 2024, as indicated by a private survey from S&P Global. The RatingDog China General Services Purchasing Managers' Index (PMI) fell to 50.4, down from 54.1 in June, though it remained above the 50-point threshold separating growth from contraction.
The slowdown was attributed to moderating growth in both overall activity and new business, with domestic demand being a key factor. The pace of new business growth reached its slowest point since March.
Despite the domestic slowdown, services exports saw growth for the third consecutive month, driven by factors such as overseas client demand linked to exhibitions and study tours, increased financial transactions, and effective management. Firms continued to add staff, though at a reduced pace compared to June.
Business sentiment, while still positive, softened to its lowest level since February 2020. The Composite Output Index, which aggregates manufacturing and services performance, also declined to 50.8 from 53.6 in the prior month.
This private survey's reading for services activity was more optimistic than the official survey, which indicated a contraction in the sector.