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<Econ> China Mar RatingDog Services PMI Falls to 52.1
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Data jointly released by RatingDog and S&P Global showed that the RatingDog Services PMI fell to 52.1 in March from Februarys 33-month high of 56.7, below market expectations of 53.6. Although the pace of expansion slowed, it remained in line with the average since early 2024. The Composite Output Index registered 51.5 in March, staying above the neutral level but down from 55.4 in February, indicating that overall business activity of Chinese enterprises continued to expand. While growth eased from Februarys 33-month high, it was broadly in line with the average seen over the past two years. Data indicated that Chinas services sector continued to expand in March. Business activity and new orders both increased further. Although growth moderated from February, companies remained optimistic about the business outlook for the next 12 months. Cost pressures stayed mild, allowing firms room to lower selling prices. Data also showed that at the end of 1Q26, services activity expanded, driven by new business inflows. The volume of new business has now risen for 39 consecutive months. The increase in new orders was linked to stronger customer demand, a growing client base, referrals from existing customers and new projects. The domestic market remained the primary driver of services demand. New business from international markets declined, failing to extend the growth trend seen in the first two months of the year, though the drop was only marginal. Despite slower new business growth in March, outstanding business volumes continued to rise, supported by strong demand in February. Although both backlogs and new business increased in March, the slower pace of growth enabled services firms to reduce staffing levels. Reported reasons for lower employment included resignations and retirements, non-replacement of departing staff and organizational restructuring. Meanwhile, cost burdens rose only moderately in March, giving services firms flexibility to reduce prices. Looking ahead to the next 12 months, the services sector remained optimistic about business activity. Although business confidence edged down slightly from February, it was broadly in line with the trend seen since early 2025. Yao Yu, founder of RatingDog, said that although the pace of services expansion slowed in March, the foundation of domestic demand remained broadly solid. Easing cost pressures and proactive pricing strategies helped stabilize end-market demand. However, fluctuations in external demand and continued contraction in the labor market remain factors to watch. The Services PMI is expected to stay in expansion territory in the near term. (ta/w) This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. Auto-translated by AI AASTOCKS Financial News |
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