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China services growth slows sharply as domestic demand weakens
China’s RatingDog services PMI fell to 50.4 in July, its lowest since September 2024, while composite activity slowed to 50.8.
China’s services sector stayed in expansion in July, but growth slowed sharply as domestic demand weakened, according to Action Forex’s read of the RatingDog survey.
The China General Services PMI dropped to 50.4 from 54.1 in June, the lowest since September 2024. The Composite PMI eased to 50.8 from 53.6, marking the slowest pace of overall private sector growth in a year.
Action Forex said weaker domestic demand drove the moderation, with total new business rising for a 43rd consecutive month but at its weakest pace since March. External demand remained comparatively more resilient, as new export business stayed in expansion for a second straight month, despite easing from June’s year-to-date high.
The report also showed cost pressures easing, with input price inflation slowing to its weakest since January and firms raising selling prices only modestly. Employment increased for a third straight month and work backlogs rose for a ninth month, while business confidence fell to its lowest since February 2020, signaling growing caution about the outlook.