Data released by Caixin/S&P Global showed that business activity growth in China's services sector slowed in August amid easing new order growth and a marginal drop in employment.
According to the report, the services PMI fell to 51.6 points in August from 52.1 points in July. Economists had expected an increase to 52.2 points. The index remains above the 50-point mark, indicating an expansion of activity in the sector, since January 2023, but the pace of growth being among the lowest in the year-to-date.
The report showed that new orders rose again, but the growth rate slowed compared to July. New export orders also rose in August, and even accelerated compared to the previous months. Meanwhile, employment declined in August after rising in July, which was due to resignations and redundancies stemming from the need to lower costs. The data also indicated renewed accumulation of unfinished business in August. As for the inflationary situation, average input prices continued to rise in August, recording the strongest growth since June 2023 amid reports of rising input material, staff and transportation costs. In contrast, selling prices fell for the first time in seven months. Overall sentiment in the service sector remained positive in August - the level of optimism rose for a second successive month to the highest since May.