06-May-2026 08:34

China's services sector recorded stronger growth in April 2026, supported by rising activity and new business, according to the latest PMI data. The China General Services Business Activity Index increased to 52.6 from 52.1 in March, remaining well above the 50.0 mark and signalling a sharper expansion. Growth in the sector has continued since January 2023.

The improvement was driven by a faster rise in new business, which expanded for the 40th consecutive month'one of the longest growth streaks on record. Companies linked higher demand to better market conditions, new projects, product launches, and promotional efforts. However, new export orders declined for the second straight month, though only slightly.

Business sentiment also improved, with firms expressing optimism about the year ahead due to expansion plans, improved efficiency, and stronger market opportunities. Despite rising workloads, employment declined marginally for the third month in a row, as firms reduced staff due to cost-saving measures and natural attrition.

Input costs increased at the fastest pace seen so far in 2026, mainly due to higher oil and fuel prices. However, overall cost pressures remained moderate, allowing companies to reduce selling prices again, marking the fourth decline in the past five months.

At the broader level, the Composite PMI rose to 53.1 in April from 51.5 in March, indicating stronger overall economic activity. Growth was supported by both manufacturing and services, with faster increases in new orders. While employment dipped slightly, price pressures intensified, with input costs rising at the fastest rate since April 2022 and selling prices increasing at a 31-month high.

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