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Business Standard
2 days ago
- Business
- Business Standard
China May services activity grows despite US tariff concerns, PMI at 51.1
China's services activity expanded at a slightly faster pace in May, with new orders growing more quickly than in April, though new export orders declined due to uncertainty stemming from US tariffs, a private sector survey showed on Thursday. The Caixin/S&P Global services purchasing managers' index (PMI), rose to 51.1 in May from 50.7, remaining above the 50-mark that separates expansion from contraction. The reading was broadly in line with China's official survey, which showed services activity edging up to 50.2 from 50.1 the previous month. The Caixin PMI is considered a better read of trends among smaller, export-oriented firms, particularly along the east coast, while the official PMI primarily tracks large and medium-sized enterprises, including state-owned companies. China's economy grew faster than expected in the first quarter, and the government has maintained its annual growth target of around 5 per cent. However, analysts warn that US tariffs could significantly dampen momentum. Beijing and Washington have agreed to a 90-day pause during which both would cut import tariffs, raising hopes of easing tensions. Yet investors remain concerned that negotiations could progress slowly amid persistent global economic risks. "On the external demand front, new export orders remained sluggish in both the manufacturing and services sectors. Average costs for businesses rose slightly, but selling prices continued to weaken, increasing profit pressure," said Zhe Wang, senior economist at Caixin Insight Group. However, faster services growth failed to offset a drop in manufacturing production. The Caixin China General Composite PMI fell to 49.6 from 51.1 the previous month, marking the first contraction since December 2022. Last month, the central bank eased monetary policy to limit damage from the trade war with Washington, and lowered the ceiling for deposit rates to offset margin pressure on banks and prompt savers to spend or invest more. Both supply and demand expanded at a slightly quicker pace, as businesses sought to attract new clients. However, foreign demand weakened due to US-China tariff uncertainty, with new export orders declining for the first time this year, the survey showed. Employment-related indices remained slightly above the 50-mark. Some firms continued to reduce headcounts to cut costs, while others hired more workers to meet rising demand. Service sector businesses faced the fastest input cost inflation since October 2024, driven by higher purchase prices and wages. Average output charges declined for the fourth month in a row in May. Overall sentiment over the next 12 months remained positive in the sector, with companies optimistic that the negative effects of US tariffs may diminish over time. "Currently, unfavourable factors remain relatively prevalent. Uncertainty in the external trade environment has increased, adding to domestic economic headwinds," said Wang "In terms of policy, the lasting impact of earlier consumption-stimulating measures needs further evaluation," Wang added "More importantly, boosting domestic demand should be grounded in improving household incomes."
Business Times
2 days ago
- Business
- Business Times
China's May services activity grows despite US tariff concerns: Caixin PMI
[BEIJING] China's services activity expanded at a slightly faster pace in May, with new orders growing more quickly than in April, though new export orders declined due to uncertainty stemming from US tariffs, a private sector survey showed on Thursday. The Caixin/S&P Global services purchasing managers' index (PMI), rose to 51.1 in May from 50.7, remaining above the 50-mark that separates expansion from contraction. The reading was broadly in line with China's official survey, which showed services activity edging up to 50.2 from 50.1 the previous month. The Caixin PMI is considered a better read of trends among smaller, export-oriented firms, particularly along the east coast, while the official PMI primarily tracks large and medium-sized enterprises, including state-owned companies. China's economy grew faster than expected in the first quarter, and the government has maintained its annual growth target of around 5 per cent. However, analysts warn that US tariffs could significantly dampen momentum. Beijing and Washington have agreed to a 90-day pause during which both would cut import tariffs, raising hopes of easing tensions. Yet investors remain concerned that negotiations could progress slowly amid persistent global economic risks. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'On the external demand front, new export orders remained sluggish in both the manufacturing and services sectors. Average costs for businesses rose slightly, but selling prices continued to weaken, increasing profit pressure,' said Zhe Wang, senior economist at Caixin Insight Group. However, faster services growth failed to offset a drop in manufacturing production. The Caixin China General Composite PMI fell to 49.6 from 51.1 the previous month, marking the first contraction since December 2022. Last month, the central bank eased monetary policy to limit damage from the trade war with Washington, and lowered the ceiling for deposit rates to offset margin pressure on banks and prompt savers to spend or invest more. Both supply and demand expanded at a slightly quicker pace, as businesses sought to attract new clients. However, foreign demand weakened due to US-China tariff uncertainty, with new export orders declining for the first time this year, the survey showed. Employment-related indices remained slightly above the 50-mark. Some firms continued to reduce headcounts to cut costs, while others hired more workers to meet rising demand. Service sector businesses faced the fastest input cost inflation since October 2024, driven by higher purchase prices and wages. Average output charges declined for the fourth month in a row in May. Overall sentiment over the next 12 months remained positive in the sector, with companies optimistic that the negative effects of US tariffs may diminish over time. 'Currently, unfavourable factors remain relatively prevalent. Uncertainty in the external trade environment has increased, adding to domestic economic headwinds,' said Wang 'In terms of policy, the lasting impact of earlier consumption-stimulating measures needs further evaluation,' Wang added 'More importantly, boosting domestic demand should be grounded in improving household incomes.' REUTERS
Economic Times
06-05-2025
- Business
- Economic Times
China's services growth hits 7-month low as tariffs bite, Caixin PMI shows
China's services sector experienced its slowest expansion in seven months in April, as the Caixin PMI fell to 50.7, impacted by U.S. tariffs and subdued business sentiment. New business growth weakened, leading to job cuts and price reductions by service providers. Policymakers are urged to take action to mitigate the effects of the ongoing trade standoff. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads China's services activity expanded at the slowest pace in seven months in April, with new orders growth slackening from March, weighed by uncertainty caused by U.S. tariffs, a private sector survey showed on Caixin/S&P Global services purchasing managers' index (PMI), fell to 50.7 from 51.9 in March, its lowest reading since September. The 50-mark separates expansion from was broadly in line with the official survey, which showed services activity easing to 50.1 from 50.3 in the previous month. The Caixin PMI is considered a better read of trends among more export-oriented and smaller stronger-than-expected economic growth in the first quarter, supported by government stimulus, China's economy contends with persistent deflationary risks, a protracted property slump, and threats from U.S. 48% of employees in China worked in the services industry in 2023 and the sector contributed 56.7% to total GDP last year. But U.S. President Donald Trump's trade actions may hit the manufacturing sector hard and hurt business hiring plans and consumer confidence."With a cloud over the market outlook, both business and consumer confidence are subdued, making it harder to boost domestic demand," said Wang Zhe, Senior Economist at Caixin Insight Group."The ripple effects of the ongoing China-U.S. tariff standoff will gradually be felt in the second and third quarters. As such, policymakers should prepare well and take action sooner rather than later," said Caixin services survey showed new business growth slowed to its weakest since December 2022, though export orders edged up slightly, partly due to tourism recovery. Some service providers cited disruptions from U.S. tariffs impacting goods sentiment in the services sector grew at the slowest pace since February 2020 with companies citing U.S. tariffs as a major providers cut jobs for the second straight month to curb costs, leading to a rise in backlogged work, pushing the corresponding gauge into expansionary territory for the first time this reduced prices to attract customers despite higher input Caixin China General Composite PMI fell to 51.1 in April from 51.8 the previous month, the ruling Communist Party's Politburo pledged to support firms and workers most affected by the impact of triple-digit U.S. tariffs and urged the country to prepare for worst-case at Morgan Stanley said last week that second quarter growth could slow one percentage point as tariffs bite."We expect Beijing to navigate the challenges with cautious and uneven stimulus policies: still relying on investment in emerging sectors and urban renewal, while gradually shifting policy towards consumption over the medium term," Morgan Stanley said in a research note. (Reporting by Liangping Gao and Ryan Woo; Editing by Sam Holmes)
Business Standard
06-05-2025
- Business
- Business Standard
China's services growth hits 7-month low as tariffs bite, PMI drops to 50.7
China's services activity expanded at the slowest pace in seven months in April, with new orders growth slackening from March, weighed by uncertainty caused by US tariffs, a private sector survey showed on Tuesday. The Caixin/S&P Global services purchasing managers' index (PMI), fell to 50.7 from 51.9 in March, its lowest reading since September. The 50-mark separates expansion from contraction. This was broadly in line with the official survey, which showed services activity easing to 50.1 from 50.3 in the previous month. The Caixin PMI is considered a better read of trends among more export-oriented and smaller firms. Despite stronger-than-expected economic growth in the first quarter, supported by government stimulus, China's economy contends with persistent deflationary risks, a protracted property slump, and threats from US tariffs. About 48 per cent of employees in China worked in the services industry in 2023 and the sector contributed 56.7 per cent to total GDP last year. But US President Donald Trump's trade actions may hit the manufacturing sector hard and hurt business hiring plans and consumer confidence. "With a cloud over the market outlook, both business and consumer confidence are subdued, making it harder to boost domestic demand," said Wang Zhe, Senior Economist at Caixin Insight Group. "The ripple effects of the ongoing China-US tariff standoff will gradually be felt in the second and third quarters. As such, policymakers should prepare well and take action sooner rather than later," said Wang. The Caixin services survey showed new business growth slowed to its weakest since December 2022, though export orders edged up slightly, partly due to tourism recovery. Some service providers cited disruptions from US tariffs impacting goods trade. Business sentiment in the services sector grew at the slowest pace since February 2020 with companies citing US tariffs as a major concern. Service providers cut jobs for the second straight month to curb costs, leading to a rise in backlogged work, pushing the corresponding gauge into expansionary territory for the first time this year. Firms reduced prices to attract customers despite higher input costs. The Caixin China General Composite PMI fell to 51.1 in April from 51.8 the previous month. Last month, the ruling Communist Party's Politburo pledged to support firms and workers most affected by the impact of triple-digit US tariffs and urged the country to prepare for worst-case scenarios. Economists at Morgan Stanley said last week that second quarter growth could slow one percentage point as tariffs bite. "We expect Beijing to navigate the challenges with cautious and uneven stimulus policies: still relying on investment in emerging sectors and urban renewal, while gradually shifting policy towards consumption over the medium term," Morgan Stanley said in a research note.
Time of India
06-05-2025
- Business
- Time of India
China's services growth hits 7-month low as tariffs bite, Caixin PMI shows
China's services activity expanded at the slowest pace in seven months in April, with new orders growth slackening from March, weighed by uncertainty caused by U.S. tariffs, a private sector survey showed on Tuesday. #Pahalgam Terrorist Attack India orders nationwide defence drills as Indo-Pak tensions rise From blackouts to bunkers: Inside India's civil defence mock drills across 244 districts on May 7 A woman spy who helped India defeat Pakistan in 1971 The Caixin/S&P Global services purchasing managers' index (PMI), fell to 50.7 from 51.9 in March, its lowest reading since September. The 50-mark separates expansion from contraction. This was broadly in line with the official survey, which showed services activity easing to 50.1 from 50.3 in the previous month. The Caixin PMI is considered a better read of trends among more export-oriented and smaller firms. Continue to video 5 5 Next Stay Playback speed 1x Normal Back 0.25x 0.5x 1x Normal 1.5x 2x 5 5 / Skip Ads by by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Apply Now Undo Despite stronger-than-expected economic growth in the first quarter, supported by government stimulus, China's economy contends with persistent deflationary risks, a protracted property slump, and threats from U.S. tariffs. About 48% of employees in China worked in the services industry in 2023 and the sector contributed 56.7% to total GDP last year. But U.S. President Donald Trump's trade actions may hit the manufacturing sector hard and hurt business hiring plans and consumer confidence. Live Events "With a cloud over the market outlook, both business and consumer confidence are subdued, making it harder to boost domestic demand," said Wang Zhe, Senior Economist at Caixin Insight Group. "The ripple effects of the ongoing China-U.S. tariff standoff will gradually be felt in the second and third quarters. As such, policymakers should prepare well and take action sooner rather than later," said Wang. The Caixin services survey showed new business growth slowed to its weakest since December 2022, though export orders edged up slightly, partly due to tourism recovery. Some service providers cited disruptions from U.S. tariffs impacting goods trade. Business sentiment in the services sector grew at the slowest pace since February 2020 with companies citing U.S. tariffs as a major concern. Service providers cut jobs for the second straight month to curb costs, leading to a rise in backlogged work, pushing the corresponding gauge into expansionary territory for the first time this year. Firms reduced prices to attract customers despite higher input costs. The Caixin China General Composite PMI fell to 51.1 in April from 51.8 the previous month. Last month, the ruling Communist Party's Politburo pledged to support firms and workers most affected by the impact of triple-digit U.S. tariffs and urged the country to prepare for worst-case scenarios. Economists at Morgan Stanley said last week that second quarter growth could slow one percentage point as tariffs bite.
