China Services Activity Logs Softest Growth In 9 Months

(RTTNews) - China's services activity expanded at the slowest pace in nine months in June on falling export business, survey data from S&P Global showed on Thursday.

The Caixin services Purchasing Managers' Index registered 50.6 in June, down from 51.1 in May.

The score has remained above the 50.0 threshold for the thirtieth consecutive month and the reading signaled the softest rise since last September.

The moderation in the new business growth was the major reason for the softer rise in services activity. Export business decreased at the fastest pace since December 2022.

Service providers lowered their staffing levels due to the slowdown in new order growth. The fall in employment contributed to a build-up of outstanding work in June.

Regarding prices, the survey showed that average input costs remained on an upward trend due to higher raw material and fuel costs. Companies continued to cut their output charges due to intense market competition.

Overall sentiment among service providers remained positive as they expect better economic conditions to spur sales and push up activity over the coming twelve months.

The survey showed that the overall private sector returned to expansion in June after falling in the prior month amid a fresh increase in factory output.

The composite output index posted above the 50.0 no-change threshold at 51.3 in June, up from 49.6 in May.

Underlying data revealed that a renewed increase in manufacturing output had offset a softening of services activity growth.

"While some of the existing stimulus policies may have front-loaded short-term consumption, unleashing consumption potential in the long term still relies on stabilizing employment, reinforcing confidence, and increasing incomes," Caixin Insight Group Senior Economist Wang Zhe said.