China Services PMI Rises in April Despite Weak Export Demand

China’s services sector expanded at a faster pace in April, supported by stronger domestic demand and rising new business activity, according to a private survey released Wednesday. The latest data highlights the mixed recovery in the world’s second-largest economy as external pressures and weak overseas demand continue to weigh on growth.

The RatingDog China General Services Purchasing Managers’ Index (PMI), compiled by S&P Global, climbed to 52.6 in April from 52.1 in March. A reading above 50 indicates expansion, signaling continued growth in China’s services industry.

The private-sector survey differed from China’s official PMI data released last week, which showed the services sector slipping back into contraction territory after a brief recovery in the previous month. Analysts noted that the two reports use different survey samples, which can lead to varying results.

China’s economy continues to face challenges from slowing exports, softer retail sales, and weaker industrial production. At the same time, producer prices have started to recover from years of deflation, increasing operational costs for businesses already struggling with limited pricing power and cautious consumer spending.

Geopolitical tensions are also adding uncertainty to the outlook. The ongoing conflict in the Middle East has pushed up oil, fuel, and freight costs, creating additional pressure on Chinese companies and global supply chains.

The survey showed that new business growth accelerated in April, driven mainly by stronger domestic demand. However, new export orders declined for the second straight month, reflecting continued weakness in overseas markets.

Service providers also reduced staffing levels for a third consecutive month as companies implemented cost-cutting measures and dealt with employee retirements and resignations. Meanwhile, firms lowered selling prices for a second month to remain competitive and attract customers despite rising input costs.

Despite these challenges, business confidence for the coming year remained positive. China’s Composite Output Index, which combines manufacturing and services activity, rose to 53.1 in April from 51.5 in March, indicating broader economic expansion.