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China services activity remains steady as expected in April- Caixin PMI

Published 05/05/2024, 09:54 PM
© Reuters
- China’s services sector grew at a steady pace in April as expected, a private survey showed on Monday, as new business activity grew and as export demand also improved from last year’s lows. 

The Caixin Services Purchasing Managers Index (PMI) read 52.5 in April, in line with expectations, and fell slightly from the prior month’s reading of 52.7. 

The reading indicated that some aspects of the Chinese economy remained resilient, especially amid sustained stimulus and policy support from Beijing. External demand also appeared to be improving.

“The recovery of the global economy has resulted in an increase in inbound tourist numbers. This has helped produce an upward trend in service exports,” Wang Zhe, Senior Economist at Caixin Insight Group said in a note. 

Monday’s data comes after somewhat middling official PMI readings from last week, which showed that while manufacturing activity slowed slightly less than expected, growth in non-manufacturing activity slowed substantially. 

Still, the Caixin PMI differs from the official PMIs in its scope of businesses covered. While Caixin focuses more on smaller, private businesses in the South, the official PMIs cover larger state-owned businesses in the North. 

The Caixin survey showed that while activity was improving, service providers saw little pressure to increase their capacity, which also saw employment remain weak. Average costs also rose at a languid pace, indicating little inflationary pressure.

China’s economy saw a strong first quarter amid continued government support and improved consumer spending. But this boost is expected to have run out of steam as the second quarter began. 


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