China Services Growth Beats Estimates

The RatingDog China General Services PMI rose to 51.4 in August 2026 recovering from a 22-month low of 50.4 hit in July, and surpassing market forecasts of 50.6. Still, the latest reading was the second-lowest in 14 months. The increase was mainly supported by domestic demand, while foreign sales rose for the fourth straight month, but at a more modest pace than in July. Employment rose for the fourth consecutive month, marking the longest sequence of growth since 2023. On the price front, input cost inflation accelerated due to higher labor, raw material, oil, and diesel costs. Meanwhile, output prices rose for the third month running, marking the longest sequence of inflation in the sector since the first half of 2024. However, selling price inflation was unchanged from July and remained marginal. Lastly, sentiment strengthened amid hopes of business expansion plans, new projects, and expected market growth.

The RatingDog China General Services PMI declined to 50.4 in July 2026 from 54.1 in June, falling below market forecasts of 53.7. It was the slowest expansion in services activity since September 2024 as new business growth moderated for the second straight month, easing to a four-month low amid softer domestic demand. However, new export orders rose for the third consecutive month, supported by stronger overseas demand. Employment rose for the third consecutive month, though at a slower pace than in June. On the price front, input costs increased due to higher labour, raw material, advertising, and diesel costs. However, input cost inflation eased to a six-month low. Meanwhile, output prices continued to rise, marking the first back-to-back increases in the sector in a year and a half, driven by higher operating expenses, oil prices, and insurance premium changes. Finally, business sentiment fell to its lowest level since February 2020.

The RatingDog China General Services PMI declined to 54.1 in June 2026 from May's three-month high of 54.4. However, the latest reading exceeded market forecasts of 53.0 and pointed to the third-steepest increase in services activity in nearly three years, supported by domestic demand. Meanwhile, new export business expanded for the second consecutive month and at the fastest pace since October 2024. Employment increased for the second consecutive month, marking the first back-to-back increase since 2024 and the fastest rise since July 2024. On the price front, input costs rose due to higher labour, raw material, and transportation costs. However, input cost inflation eased from May's 19-month high. Meanwhile, output cost inflation accelerated for the first time in four months, the highest level in more than two years. Looking ahead, business sentiment remained positive and broadly comparable to that seen in May.