China’s services PMI drops slightly in April, but external demand stands out

China’s services sector purchasing managers’ index (PMI) fell from 52.7 in March to 52.5 in April, according to a survey of business activity carried out by Caixin Insight Group, in partnership with S&P Global and released this Monday (6).

Although slightly weaker, the indicator remains above the neutral line of 50.0, which separates contraction from expansion for 16 consecutive months.

According to the survey, the volume of new business is also expanding for the sixteenth consecutive month and the panel members attributed this behavior to the improvement in demand conditions and the expansion of customer bases, supported by business development efforts.

In line with new global business, external demand for China’s services also increased in April. New export business grew at the fastest rate in ten months.

Commenting on the indicator, Wang Zhe, senior economist at Caixin Insight Group, said that the recovery of the global economy has resulted in an increase in the number of tourists arriving in China.

“This helped produce an upward trend in services exports, allowing the corresponding indicator to remain in positive territory for the eighth consecutive month and reach the highest level since last June.”