China’s services sector expanded faster than expected in August, supported by stronger business activity, rising new orders and continued job creation.
The data pointed to a modest improvement in domestic demand, although the overall pace of growth remained moderate.
China Services PMI Rises Above Forecasts
The RatingDog Services PMI increased to 51.4 in August, up from 50.4 in July.
The reading also beat market expectations of 50.6.
A PMI reading above 50 signals expansion, while a figure below 50 indicates contraction.
Despite the improvement, the August figure was still the second-lowest reading in 14 months. This suggests that growth in China’s services sector remains relatively subdued.
New Orders Strengthen in August
New business increased for the 44th consecutive month.
Growth also accelerated from July’s four-month low, mainly due to stronger domestic demand.
New export orders rose for a fourth straight month as well. However, the pace of export growth slowed compared with July.
Employment Rises for a Fourth Month
Employment in China’s services sector increased for the fourth consecutive month.
This marked the longest period of continuous job creation since 2023 and provided another positive signal for the sector.
The rise in employment suggests that service companies are becoming slightly more confident about future demand.
Cost Pressures Increase Slightly
Input costs also continued to rise in August.
Prices paid by service companies increased for the 18th consecutive month, while businesses raised their output prices for a third straight month.
However, both increases remained relatively small, indicating that inflationary pressures in the services sector were still limited.
Private and Official PMI Data Diverge
The stronger RatingDog Services PMI contrasts with China’s official services data.
The official services reading remained unchanged at 49.3 in August, the same level recorded in July.
Because the figure stayed below the 50-point threshold, the official data continued to signal contraction.
The difference between the two surveys highlights mixed conditions across China’s services economy, with some indicators pointing to improvement while others continue to show weakness.
