China's services sector registered stronger expansion in April, according to a private-sector survey, as new domestic orders picked up while overseas business softened.
The RatingDog China General Services purchasing managers' index, compiled by S&P Global, rose to 52.6 in April from 52.1 in March, staying above the 50-point benchmark that separates expansion from contraction.
This private reading diverged from an official survey released last week that indicated services activity had slipped back into contraction after expanding the previous month. The two surveys draw on different respondent samples.
Survey results pointed to a broader economic picture where several demand indicators are cooling: China's export engine has shown signs of strain, retail sales and industrial output have moderated, and producer prices have moved up from a years-long period of deflation. Analysts referenced in the survey commentary said that the reversal in producer price trends could squeeze firms already contending with higher costs and limited ability to pass those costs on amid weak demand.
External uncertainty is adding to pressures on businesses. The war in the Middle East was cited as increasing uncertainty around global demand and supply chains, a development that could further press on margins for Chinese companies already managing softer orders and cautious household and business spending.
On activity components, new business expanded at a faster pace in April, led primarily by domestic demand. New export business fell for a second successive month, although the decline was marginal.
Service providers reduced staffing for a third month running, with firms pointing to retirement, resignations and cost-control measures as reasons for workforce cuts. Outstanding business remained in expansion territory, continuing a trend that the survey noted has been in place since October 2025.
Input cost inflation accelerated to its highest level so far this year. Firms attributed the rise in input costs to firmer oil, fuel and freight prices stemming from the Middle East conflict. In response to tougher conditions, companies trimmed their selling prices for a second month in an effort to attract and retain clients.
Despite pressures on margins and demand, business sentiment remained positive. The Composite Output Index climbed to 53.1 in April from 51.5 in March, holding above the 50.0 no-change threshold and indicating continued overall expansion.
What the data shows:
- Private services PMI improved in April with stronger new domestic orders.
- Export business declined for a second month, while staffing cuts continued for service firms.
- Input cost inflation rose to the highest level so far this year; firms reduced selling prices for a second month.