China’s services activity picks up slightly in October, but sales soften and employment stagnates

Caixin/S&P Global services purchasing managers’ index (PMI) rose to 50.4 in October, up from 50.2 in September

China’s official non-manufacturing PMI stood at 50.6 in October, compared to 51.7 in September

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Caixin/S&P Global services purchasing managers’ index (PMI) rose to 50.4 in October, up from 50.2 in September. Photo: Bloomberg

Published: 10:00am, 3 Nov 2023Updated: 10:07am, 3 Nov 2023

China’s services activity expanded at a slightly faster pace in October, a private-sector survey showed on Friday, with sales growing at the softest rate in 10 months and employment stagnating as business confidence waned.

The vast services sector, which provides about 48 per cent of jobs in China, enjoyed a strong rebound earlier this year, but analysts said the sluggish household income growth and uncertain job market raise questions over the sustainability of the industry’s growth.

The Caixin/S&P Global services purchasing managers’ index (PMI) rose to 50.4 in October from September’s nine-month low of 50.2. The pace of expansion also remained much slower than seen on average in the first half of the year.

The 50-point mark separates expansion from contraction in activity.

An official survey showed on Tuesday that services PMI dropped to 50.1 from 50.9 in September.

“The services sector, which is highly related to youth employment, recovered 90 per cent to pre-Covid levels,” said Xing Zhaopeng, senior China strategist at ANZ.