The Purchasing Managers’ Activity Index (PMI) for services, calculated by S&P Global and Chinese business media Caixin, rose to 52.2 points in December, from 51.5 the previous month.
Growth in China’s services sector rebounded in December to its highest level in seven months, according to an independent barometer published on Monday, confirming a recovery in consumption at the end of 2024.
The Purchasing Managers’ Activity Index (PMI) for services, calculated by S&P Global and Chinese business media Caixin, rose to 52.2 points in December, from 51.5 the previous month.
The increase exceeds the forecasts of economists surveyed by the Bloomberg agency (51.4), and confirms the acceleration signaled by the official index published last Tuesday (52.2).
This barometer is a key indicator for assessing the level of domestic consumption and the job market situation.
Above 50 points, it reflects an expansion of activity. Below that, it would be a contraction.
Growth in the sector in December was supported by an increase in new orders, the report highlights. Sales prices also increased for the first time in six months.
The authorities have announced in recent weeks a series of measures to stimulate an economy gripped by sluggish consumption and a persistent real estate crisis.
“Since the end of September, the synergy between existing policies and additional stimulus measures have had an effect on the market,” says Wang Zhe, economist for Caixin cited in the press release.
Uncertainties in the international market, however, are among the main factors of concern for the companies surveyed, notes the press release.
The upcoming return to the White House of US President-elect Donald Trump has also raised fears of a worsening of trade tensions with Washington.
On the economic level in general, “significant downward pressures persist, due to sluggish domestic demand and increasingly unfavorable external factors,” underlines Wang Zhe.
The Caixin composite PMI index published on Monday, which combines services and manufacturing, remained in positive territory in December (51.4), but fell compared to November (52.3).
The vitality of services has “largely compensated for the slowdown in growth in the manufacturing sector”, according to Gabriel NG, of the firm Capital Economics.
China must announce the official figure for its growth in 2024 in mid-January. The objective set by the government is “around 5%”.
Chinese President Xi Jinping said in late December that China’s economy was under “pressure” to “transform” and was “facing an uncertain external environment.”
