FINWIRES · TerminalLIVE
FINWIRES

China's Service Sector Growth Picks Up in August on Stronger Domestic Demand, S&P Survey Shows

By
China's Service Sector Growth Picks Up in August on Stronger Domestic Demand, S&P Survey Shows

China's service sector activity expanded at a faster pace in August, supported by strengthening domestic demand and extended job growth, according to data from S&P Global released Thursday.

The headline RatingDog China General Services Business Activity Index rose to 51.4 in August from 50.4 in July and beating market expectations. While marking the second-lowest reading in 14 months, the index remained firmly above the 50.0 neutral threshold, continuing an expansion streak that began in January 2023.

Total new business grew for the 44th straight month, with growth surging from the four-month low in July, RatingDog founder Yao Yu said. New export business also widened for the fourth consecutive month.

Business backlogs also rose for the 10th consecutive month, while staffing levels increased for the fourth straight month, the longest growth sequence seen since 2023, as business capacity expanded, according to S&P.

Business sentiment among service companies in China for the next 12 months stayed positive, supported by planned expansions, new projects, market growth optimism, more pormotions, and better strategies, according to the note.

The broader China Composite Output Index rose to 52.1 in August from 50.8 in July as business activity expanded faster during the month. However, the growth rate is still below the average for 2026.

Manufacturing and service output and new businesses grew. Employment increased for the fourth straight time and input price inflation saw a modest rise.

Related Articles

Japan's Services Activity Growth Hits Five-Month High in August, S&P Global Says
US Markets

Japan's Services Activity Growth Hits Five-Month High in August, S&P Global Says

Japan's services activity expanded at a faster pace in August, supported by stronger domestic demand and higher new business, S&P Global said Thursday.The headline seasonally adjusted S&P Global Japan Services PMI Business Activity Index rose to 52.5 in August from 51.2 in July, marking the third straight month of expansion and the strongest rate of growth since March.Total new order growth also picked up from July's 25-month low, driven largely by firmer domestic demand. However, the new export business continued to decline sharply."Growth momentum picked up across Japan's service sector in August, with business activity rising at the fastest pace since March and new order growth improving from July's recent low," Annabel Fiddes, S&P Global Market Intelligence's economics associate director, said.Hiring remained subdued, with employment growth slowing for a second straight month to its weakest pace in a year.Outstanding business rose only slightly, while business confidence improved from July but remained among the lowest levels seen in recent years.Cost pressures remained substantial, prompting service providers to raise output prices at the second-fastest pace on record. Fiddes said sharp cost pressures, alongside stronger growth, strengthened the case for another Bank of Japan interest-rate hike.The S&P Global Japan Composite Output Index rose to 53.5 in August from 52.7 in July, with private-sector activity expanding for a 17th straight month and at its fastest pace since before the outbreak of war in the Middle East in February.

Nikkei 225
Hong Kong Private Sector Contracts in August Amid Subdued Demand, S&P Survey Shows
US Markets

Hong Kong Private Sector Contracts in August Amid Subdued Demand, S&P Survey Shows

Business conditions in Hong Kong's private sector deteriorated in August for the first time in four months, as demand and output weakened amid subdued market conditions.The headline seasonally adjusted S&P Global Hong Kong SAR Purchasing Managers' Index (PMI) dropped to 49.5 from 51.0 in July, according to data on Thursday. A reading below the neutral 50.0 threshold indicates a contraction in sector activity.The decline was driven by renewed contractions in output and new business, marking the third time in six months that sales have dropped. New export orders also declined, despite a slight increase in demand from mainland China."Firms often linked the latest deterioration to subdued market conditions, both locally and globally, which have been exacerbated by high prices," said Usamah Bhatti, an economist at S&P Global Market Intelligence.The ongoing conflict in the Middle East also continued to weigh on supply chains, lengthening delivery lead times for local firms. Additionally, the drop in output and a decrease in backlogs of work weighed on the jobs market, leading to reduced staffing levels, S&P said.The private sector contraction follows a broader economic moderation. Hong Kong's gross domestic product grew 4.3% year on year in the second quarter, slowing from the 5.9% expansion recorded in the first quarter.However, real GDP for the first half of 2026 still rose 5.1% year on year, marking the strongest first-half performance in nearly five years, according to government data. Authorities expect strong global demand for artificial intelligence-related electronic products and corresponding logistics services to help support broader economic growth through the second half of the year.

Hang Seng
Australia's Service Sector Enjoys Third Consecutive Month of Growth as Business Confidence Builds
US Markets

Australia's Service Sector Enjoys Third Consecutive Month of Growth as Business Confidence Builds

Australia's service sector experienced a third consecutive month of business activity expansion in August as new orders continued on an upward trajectory and business confidence recovered further.The seasonally adjusted S&P Global Australia Services PMI Business Activity Index posted at 53.2 in August, slightly lower than the previous month's 53.6 reading but well above the 50 mark that separates growth from contraction, the index provider said Thursday.Four of the five general categories covered saw activity rise in August, with transport and storage posting the sharpest expansion as the sector grew for the first time since February, while information and communication was the outlier.The growth came as new orders jumped for the second straight month, rising at a modest pace and broadly in line with the expansion recorded in July. However, new export orders fell again amid elevated fuel costs and lower tourist volumes, although the pace of the decline was the least pronounced in the current sequence of drops, S&P said.Amid a robust pipeline of new business and expansion plans, firms in the service sector remained optimistic on business activity gaining traction over the coming 12 months. Confidence improved to a six-month high in August and was only a touch below levels seen before the Middle East conflict broke out."Although the latest expansions in business activity and new orders were solid but unspectacular, rising business confidence and reports of strong pipelines of new work hint at improving growth rates in the months ahead," said Andrew Harker, economics director at S&P Global Market Intelligence.Input prices continued to increase sharply in August as the rate of inflation ticked up from the previous month due to rising fuel prices and wage pressures, prompting service providers to raise output prices accordingly.Higher input costs could constrain the rate of expansion going forward, but for now, the third quarter appears to be providing "a decent outturn" for gross domestic product, Harker said.

ASX 200