China Private Services PMI Slows Sharply to 50. 4 as Domestic Demand Loses Momentum - ActionForex
China’s services sector remained in expansion in July, but growth slowed sharply as domestic demand weakened. The RatingDog China General Services PMI fell from 54. 1 in June to 50. 4, its lowest reading since. . .
China’s services sector remained in expansion in July, but growth slowed sharply as domestic demand weakened. The RatingDog China General Services PMI fell from 54. 1 in June to 50. 4, its lowest reading since September 2024, while the Composite PMI declined from 53. 6 to 50. 8, marking the slowest pace of overall private sector growth in a year. The latest survey suggests economic activity continued to expand, but momentum softened noticeably after a stronger first half. The moderation was driven primarily by weaker domestic demand. Total new business increased for a 43rd consecutive month, but growth slowed to its weakest pace since March. In contrast, external demand remained comparatively resilient, with new export business staying in expansionary territory for a second straight month despite easing from June’s year-to-date high. Cost pressures also continued to ease, with input price inflation slowing to its weakest since January, while firms raised selling prices only modestly. Despite softer demand, the survey contained several encouraging signs. Employment increased for a third consecutive month, the longest period of job creation since the second half of 2024, while backlogs of work rose for a ninth straight month, suggesting firms continue to see enough activity to support hiring. However, business confidence weakened to its lowest level since February 2020, highlighting growing caution over the economic outlook. The report points to an economy that is still expanding, but one that is becoming increasingly dependent on resilient exports as domestic demand loses momentum. Data SummaryComponentJuly 2026June 2026TrendServices PMI50. 454. 1▼ Lowest since Sep 2024Composite PMI50. 853. 6▼ Slowest growth in one yearBusiness activityExpandedExpandedGrowth slowed sharplyNew businessExpandedExpandedWeakest growth since Mar 2026New export business52. 0HigherStill in expansionInput costsIncreasedIncreasedInflation eased to lowest since Jan 2026Selling pricesIncreasedIncreasedInflation moderatedEmploymentExpandedExpandedThird consecutive monthly increaseOutstanding businessIncreasedIncreasedNinth straight monthly riseBusiness confidencePositivePositiveLowest since Feb 2020Key TakeawaysChina’sServices PMI dropped sharply to 50. 4from54. 1, marking the weakest expansion sinceSeptember 2024. TheComposite PMI slowed to 50. 8, signalling the weakest pace of private-sector growth in a year as both manufacturing and services lost momentum. Domestic demand softened noticeably, withnew business expanding at the slowest pace since March, while export demand remained comparatively resilient. Cost pressures continued to ease, withinput cost inflation slowing to its weakest since January, providing some relief to businesses. Employment expanded for athird consecutive monthand backlogs of work increased for aninth straight month, suggesting firms are still seeing sufficient workloads. Business confidence weakened to itslowest level since February 2020, highlighting growing caution over China’s economic outlook despite continued expansion. Full China private PMI Services release here. ActionForexActionForex. com was set up back in 2004 with the aim to provide insightful analysis to forex traders, serving the trading community for two decades. We started providing only a daily and a mid-day report, now known as Action Insights. Gradually, we added a lot more in-house contents to the site. Technical Outlook section was expanded to cover more pairs. In addition to that, Top Movers, Heat Map, Pivot Point Charts and Pivot Meters, Action Bias and Volatility Charts, are tools used by traders from all over the world.