Services activity in mainland China grew more in December than it had since May, Reuters reports, citing the latest Caixin/S&P Global services purchasing managers’ index (PMI). The index climbed from 51.5 in November to 52.2 in December.
The figures broadly align with the country’s official PMI findings, which showed that non-manufacturing activity increased to 52.2 in December, up from 50 the month prior. A score of 50 or above indicates growth, rather than contraction.
While a surge in domestic demand drove the improvement, Caixin/S&P Global’s results also showed that orders from abroad had declined for the first time since August 2023 – reflecting growing trade risks to the economy. Another disappointing sign was that companies reduced staff in December for the first time in four months. The rising costs of materials and wages were blamed for the cutbacks by some companies.
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Caixin Insight Group senior economist Wang Zhe noted that China’s foreign relations – particularly regarding trade with the US – were expected to become “more complex” this year. He advised “early policy preparation and timely responses.”
Wang put the “positive factors” down to Beijing’s stimulus measures, the first of which was introduced in late September, taking hold. “The synergy of existing policies and additional stimulus measures has continued to act on the market,” he said.
Meanwhile, December saw the Caixin/S&P Global Composite PMI, combining the manufacturing and services PMIs, decline to 51.4 from 52.3 in November.
