Shenzhen Composite Index

China's Services Expansion Loses Steam in July, Private PMI Shows

China's services sector expanded at its slowest pace in 10 months in July as business activity and new orders moderated, although firms continued to hire and cost pressures eased, according to the RatingDog China General Services PMI released by S&P Global on Wednesday.The RatingDog China General Services Business Activity Index fell to 50.4 in July from 54.1 in June, remaining above the 50-point threshold separating expansion from contraction but marking the weakest pace of growth since September 2024.Higher activity continued, supported by client acquisitions, project wins, business development, and AI-related services.However, new business expanded at the slowest pace in four months as domestic demand softened, while export orders remained resilient with a third straight month of growth."Sub-index data indicated a significant moderation in growth," said Yao Yu, founder of RatingDog."Total new business increased for the forty-third consecutive month, but the rate of growth was the weakest since March 2026, weighed by softer domestic demand," the statement added.Employment rose for a third consecutive month, the longest hiring streak since the second half of 2024, while backlogs of work increased for a ninth straight month.Meanwhile, input cost inflation eased to its weakest pace since January, and selling prices rose for a second month, albeit at a slower rate.The broader China Composite Output Index fell to 50.8 in July from 53.6 in June, signaling the slowest pace of overall business expansion in a year as growth softened across both manufacturing and services.The private survey contrasted with official data released last week, which showed China's official non-manufacturing PMI contracted to 49 in July from 50.2 in June.The official composite PMI dropped to 49.3 from 50.6, while the official manufacturing PMI slipped to 49.2 from 50.3.