China’s services activity expands at quicker pace in July, lifted by summer travel season

Caixin/S&P Global services purchasing managers’ index (PMI) rose to 54.1 in July up from 53.9 in June, marking an expansion for the seventh straight month

The data was in contrast to an official survey on Monday, which showed services activity has continued to soften

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Analysts said summer travel could have helped with related consumption, although sales of some big ticket items remained tepid, making July’s picture of retail sales mixed. Photo: AP

Published: 10:00am, 3 Aug 2023

China’s services activity expanded at a slightly faster pace in July, supported by a jump in business in the summer travel season, a private-sector business survey showed on Thursday, partly offsetting the drag from the weak manufacturing sector.

The Caixin/S&P Global services purchasing managers’ index (PMI) rose to 54.1 in July from 53.9 in June, marking an expansion of business activity across the services sector for the seventh straight month. The 50-point mark separates expansion from contraction in activity.

The data was in contrast to an official survey on Monday which showed services activity has continued to soften. Analysts said the different compositions of surveyed firms and methodologies may account for the divergence.

The world’s second-largest economy staged a solid rebound in the first quarter after strict coronavirus curbs were suddenly removed late last year, but the recovery has faded quickly in recent months as demand at home and abroad weakens.

Authorities have rolled out a series of policy measures in recent weeks to support the flagging recovery, though details have been scant, and investors are expecting more to come.

“In terms of policies, the top priorities should still be guaranteeing employment, stabilising expectations and increasing household income,” said Wang Zhe, senior economist at Caixin Insight Group.

Companies said improved operating conditions, greater client numbers and new product releases had boosted sales at the start of the third quarter, according to the private survey. The subindex of new business picked up from June, but was still below the series average.