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The
Caixin/S&P Global services purchasing managers' index (PMI) rose
to 54.0 from 52.5 in April, expanding for the 17th straight
month and growing at the fastest pace since July 2023. The
50-mark separates expansion from contraction.
Together with the Caixin manufacturing PMI, which hit a near
two-year high, the readings suggest business activity expanded
robustly last month, although more indicators including exports,
bank lending and retail sales due to be released would give more
clues on the growth momentum.
The Caixin/S&P's composite PMI, which tracks both the services
and manufacturing sectors, rose to 54.1 last month from 52.8 in
April, the highest in a year.
Faster new business inflows underpinned services activity
growth. New business increased at the quickest pace since May
2023, as did new export business.
Additional staff were hired last month to cope with ongoing
workload according to respondents, pushing up staffing levels to
their highest since September last year.
Price pressures intensified, however, with firms raising their
charges amid rising cost burdens.
Business confidence levels also eased to a seven-month low amid
concerns about the global economic environment and rising
prices.
China's economy staged a solid start in the first quarter,
prompting IMF and rating agency Moody's to lift their annual
growth forecasts. But a protracted property downturn has weighed
on any meaningful economic rebound.
Nomura analysts on Monday said "growth momentum has remained
tepid in general, especially for domestic demand, as developer
contract sales remain in deep contraction."
But in light of the export strength, the Japanese investment
bank revised up China's 2024 GDP growth forecast to 4.5% from
4.3% prior.
(Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)
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