China’s services activity unexpectedly accelerated in July to the fastest pace in over a year, a private survey showed, indicating resilience in the sector during the summer travel season.
The S&P China services purchasing managers’ index rose to 52.6 from 50.6 in June, marking the strongest expansion since May 2024, according to a Tuesday statement. The result beat the median forecast of 50.4 from economists surveyed by Bloomberg.
Summer is typically a peak season for services such as tourism, transportation and entertainment. Increased travel and a more stable trade environment drove the fastest rise in export orders since February, the poll suggested.
“Better demand conditions underpinned the latest rise in activity, and this had notably included firmer external demand,” Jingyi Pan, economics associate director at S&P, said in the statement.
Services firms also expanded their workforce at the quickest pace since July last year after cutting employees in June, the survey showed. Companies were at their most optimistic in four months and raised selling prices for the first time in six months.
Despite these improvement, it remains unclear if China’s sluggish consumer sentiment is turning a corner. A central bank survey revealed that residents’ perception of the jobs market fell to the worst on record in the second quarter.
Results of the private survey contrasted with those the official PMI, which showed services activity weakened in July, with a gauge falling to 50 from 50.1 a month ago. A reading above 50 indicates expansion.
While transportation, postal services and cultural entertainment expanded rapidly in the month, real estate and other consumer services contracted, the National Bureau of Statistics said in a previous statement.
The private gauge for services has often outperformed the official index over the past two years.
The surveys cover different sample sizes, locations and business types, with the S&P report focusing on small and medium-sized firms in the non-state sector. The private survey polls 650 companies in the service industry, while the official one covers 4,300 companies in the non-manufacturing sector.
Source: theedgemalaysia