China’s Service sector grows at the fastest pace in 10 months

A private sector survey showed on Wednesday that services activity in China grew in May at the fastest pace in 10 months, while employment levels expanded for the first time since January, indicating a sustained recovery in the second quarter.

According to CNBC, the Caixin/Standard & Poor’s global services purchasing managers’ index rose to 54 points from 52.5 in April, achieving growth for the seventeenth consecutive month and at the fastest pace since July 2023. The 50-point barrier is the difference between growth and contraction.

Combined with the Caixin Manufacturing Purchasing Managers’ Index, which reached its highest level in nearly two years, the readings point to business activity growing strongly last month, although more indicators, including exports, bank lending and retail sales, are due to be released, will give more insight. Evidence of the driving force of growth.

The Caixin/Standard & Poor’s Composite Purchasing Managers’ Index, which tracks the services and manufacturing sectors, rose to 54.1 last month from 52.8 in April, the highest level in a year.

New business flows boosted the growth of services activity.

Additional staff were hired last month to handle the ongoing workload, pushing staffing rates to their highest levels since September last year.

However, business confidence levels fell to a seven-month low amid concerns about the global economic environment and rising prices.

China’s economy got off to a strong start in the first quarter, prompting the International Monetary Fund and Moody’s to raise their annual growth forecasts. But the prolonged real estate downturn is weighing on any tangible economic recovery.