China's Services Growth Slows in September, Caixin PMI Shows | Investing.com
BEIJING (Reuters) - China's services sector expansion decelerated in September, with new business growth hitting a near one-year low despite a rise in exports, according to the latest Caixin/S&P Global PMI data released on Monday.
The Caixin/S&P Global services PMI fell to 50.3 in September from 51.6 in August, marking the lowest reading since September 2023. While new business from domestic sources showed minimal growth, new business from overseas markets accelerated at the fastest rate in three months.
Despite capacity pressures leading to an increase in backlogged work and hiring, firms were hesitant to raise prices in the face of rising input costs. Overall confidence dipped to its lowest level since March 2020, with concerns over competition and the global economic outlook weighing on sentiment.
The composite PMI, which combines services and manufacturing data, also decreased to 50.3 in September, down from August's 51.2.
Wang Zhe, an economist at Caixin Insight Group, noted that the latest economic data fell short of market expectations, highlighting the challenges posed by weak domestic demand and employment pressures.
In response, China's leaders have called for new policies to stimulate growth, with recent announcements including aggressive monetary easing and potential fiscal measures to support the economy.
Analysis:
In summary, China's services sector growth slowed in September, reflecting challenges in domestic demand and employment. The reluctance to raise prices amid rising costs indicates potential profitability pressures for businesses. Additionally, the decline in overall confidence underscores concerns over global economic conditions and competition. Investors should monitor future policy announcements and economic data releases for insights into China's economic trajectory and potential market impacts.
