By The services sector in China continued to show signs of expansion for the 10th consecutive month in October, according to the latest private gauge of activity. The Caixin services purchasing managers index (PMI) increased to 50.4, up from September’s 50.2, which had been the lowest reading so far this year. This index uses a threshold of 50 to separate expansion from contraction.
Although overall business activity saw a slight decline, new export businesses remained strong for a second month due to easing travel restrictions and increased tourism from overseas. However, employment growth experienced a pause after eight months of continuous expansion.
Wang Zhe, senior economist at Caixin Insight Group, noted that while the sector remained in expansion territory, the gauge for service providers’ expectations about future activity declined for the fourth consecutive month, reaching a new low since March 2020. This indicates concerns among service providers about the economic outlook.
It is worth mentioning that the Caixin PMI data differs from the official nonmanufacturing PMI, which covers both service and construction activities. According to the National Bureau of Statistics, China’s official nonmanufacturing PMI fell to 50.6 in October compared to 51.7 in September.
Overall, despite some challenges and cautious sentiment among service providers, China’s services sector continues to show resilience and remains a significant contributor to the country’s economic growth.
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