China Services Growth Beats Estimates

The RatingDog China General Services PMI increased to 54.4 in May 2026 from 52.6 in April, surpassing forecasts of 52.3. It marked the strongest growth in the services sector since February, as new orders rose at the fastest pace in three months, while export orders increased following slight declines in the previous two months. However, growth in foreign sales remained softer than domestic demand. Employment increased for the first time in four months, with the pace of job creation exceeding that recorded in January. On prices, input price inflation accelerated to its highest level since October 2024, driven by higher fuel prices and wage costs. Output price inflation was broadly unchanged, with cost pressures increasing but remaining below the long-run survey average. Lastly, sentiment improved to a three-month high, supported by improving market conditions, a brighter economic outlook, business development initiatives, increased client demand, new projects, and new business lines.

The RatingDog China General Services PMI increased to 52.6 in April 2026 from March’s three-month low of 52.1, surpassing market forecasts of 52. New business grew for the fortieth successive month, the second-longest period of continuous expansion in the survey's history, with domestic demand remaining a key driver. Meanwhile, foreign sales fell for the second straight month, although the rate of decline was only marginal and eased compared with March. Employment declined fractionally for the third month in succession. Average input price inflation accelerated to its highest level in 2026 so far, boosted by higher oil prices and fuel costs due to the impact of the war in the Middle East. Meanwhile, selling prices fell for the fourth time in the past five months, albeit marginally. Finally, business confidence was among the highest recorded over the past year, supported by new projects, market expansion, and efficiency gains.

The RatingDog China General Services PMI eased to 52.1 in March 2026 from a near three-year high of 56.7 in February, below the expected 53.7, and marking the slowest services expansion in three months. New business grew at its weakest pace since April 2025, with domestic markets remaining a key driver of demand. International new business also dipped slightly after strong growth in the first two months of the year. Despite slower new business growth, outstanding work continued to rise on February’s strong demand. Firms reduced staffing at the fastest pace in six months, though overall job cuts remained modest. Average input prices rose marginally due to higher fuel, raw materials, and labor costs, alongside promotional activities, allowing services firms to lower charges to support sales. Business confidence stayed positive, underpinned by expectations of improved market conditions and expansion plans.