China Services Activity Unexpectedly Expands

2026-06-30 01:40 By Kyrie Dichosa 1 min. read

China’s official NBS Non-Manufacturing PMI rose to 50.2 in June 2026 from 50.1 in May, defying expectations of a slight contraction to 49.9.

The business activity index for the services sector rose by 0.1 percentage point to 50.4, supported by strong activity in telecommunications, internet software and IT services, financial services, and insurance, all above 55.

In contrast, the business activity indices for air transport and real estate remained below 50.

Meanwhile, the construction index also improved to 49, 0.2 percentage points higher than in May.

In terms of new orders, the index improved to 48 from 45.

By industry, the new orders index for the construction sector was 46.3 (+2.8 pp), while the service sector came at 48.4 (+3.1 pp).

On prices, input prices fell to 49.7 from 52.2, suggesting easing price pressures, while sales prices fell to 48.4 from 48.8.

Employment also edged up to 45.8 from 45.6.

Lastly, business expectations rose to 55.3 from 54.8, showing improved sentiment.



News Stream
China Services Activity Unexpectedly Expands
China’s official NBS Non-Manufacturing PMI rose to 50.2 in June 2026 from 50.1 in May, defying expectations of a slight contraction to 49.9. The business activity index for the services sector rose by 0.1 percentage point to 50.4, supported by strong activity in telecommunications, internet software and IT services, financial services, and insurance, all above 55. In contrast, the business activity indices for air transport and real estate remained below 50. Meanwhile, the construction index also improved to 49, 0.2 percentage points higher than in May. In terms of new orders, the index improved to 48 from 45. By industry, the new orders index for the construction sector was 46.3 (+2.8 pp), while the service sector came at 48.4 (+3.1 pp). On prices, input prices fell to 49.7 from 52.2, suggesting easing price pressures, while sales prices fell to 48.4 from 48.8. Employment also edged up to 45.8 from 45.6. Lastly, business expectations rose to 55.3 from 54.8, showing improved sentiment.
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China Services Sector Shows Tentative Growth
China’s official NBS Non-Manufacturing PMI rose to 50.1 in May 2026 from 49.4 in the prior month, beating market expectations of 49.5 and returning to expansion territory. The improvement was driven by stronger activity in both the services and construction sectors, amid ongoing policy support and infrastructure-related projects. Demand conditions stabilized, with new orders falling at a slower pace (45.0 vs 44.3 in April), and new export orders improving but remaining in contraction territory (48.1 vs 47.3). Employment stayed weak despite a slight uptick (45.6 vs 45.5), reflecting continued caution among businesses. On the price front, input cost inflation accelerated (52.2 vs 51.7), suggesting higher operating expenses, while a decline in selling prices eased (48.8 vs 48.1), indicating easing deflationary pressures. Lastly, confidence was broadly unchanged from April but remained at its highest level in three months, highlighting cautious optimism about the near-term outlook.
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China’s official NBS Non-Manufacturing PMI fell to 49.4 in April 2026 from 50.1 in March, worse than the expected 49.9, signaling a renewed contraction in the services-led sector. The weakness was broad-based across subcomponents, with the business activity index declining for both construction (48.0 vs 49.3 in March) and services (49.6 vs 50.2), as sentiment weakened across most industries, although transport and telecom-related services remained relatively strong. New orders also continued to contract (44.3 vs 45.0), pointing to subdued domestic demand, while employment improved (45.5 vs 45.2) but remained in contraction, reflecting ongoing labor market softness. On prices, input costs edged down slightly (51.7 vs 52.3), while sales prices fell more sharply (48.1 vs 49.9). Meanwhile, business activity expectations strengthened to 54.7 from 54.2, suggesting firms remain cautiously optimistic about future demand despite current weakness.
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