China’s services activity expansion slowed a touch amid rising costs, but growth in new orders accelerated and business sentiment rose solidly in a boost to hopes of a sustained economic recovery, a private sector survey showed on Monday.
The Caixin/S&P Global services purchasing managers’ index (PMI) eased to 52.5 from a 52.7 in March, remaining in expansionary territory for the 16th straight month. The 50-mark separates expansion from contraction.
The world’s second-largest economy grew faster than expected in the first quarter but it is still facing a host of challenges including a prolonged property slump and lacklustre domestic demand.
“The strong start to the year is consistent with the Caixin manufacturing and services PMIs, which have remained in expansionary territory for several straight months,” said Wang Zhe, Senior Economist at Caixin Insight Group.
Overall new business hit the highest since May last year, while better overseas demand and growth in tourism activity helped propel growth in new export orders to their fastest pace in ten months.
That in turn helped lift business confidence among Chinese service providers in the 12 months ahead to the highest this year.
“Consistent efforts should be made to ensure earlier policies are implemented effectively and promptly, maintaining the current economic recovery momentum and eventually improving overall market expectations,” Wang said.
Amidst these challenges, the China Services Activity maintained its resilience, signaling ongoing growth in services-related business endeavors.
In the upcoming period, policymakers and analysts will vigilantly track China’s services activity to gauge its performance and implications for the broader economy. The slight easing seen in April emphasizes the necessity for ongoing policy support and proactive measures to uphold the momentum of economic growth in China Services Activity.
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