China's Services Sector Growth Slows, But Expansion Continues
Despite a slowdown in growth, China's services sector expanded in October, according to a private survey. This growth was supported by holiday spending and increased travel by households, even as the broader economy continues to face challenges. The survey's key indicator, the China Services Purchasing Managers' Index, slipped to 52.6 from 52.9 in September, extending a growth streak that began after the COVID-19 lockdowns in 2022. While this reading is still above the 50-point threshold that indicates expansion, it represents the slowest growth in three months, highlighting the sector's ongoing resilience in the face of economic headwinds.
The survey's findings are particularly notable given the broader economic context. As China's economy slows, the services sector has shown remarkable resilience, with growth supported by consumer spending and travel. However, the survey also underscores the sector's vulnerability to external factors, as any slowdown in consumer activity could have a significant impact on the industry's performance.
Economists surveyed by Bloomberg had forecast a median index value of 52.5, with any reading above 50 indicating expansion. The slight dip in the index value suggests that while the services sector continues to grow, its pace is slowing, which could have implications for the broader economy. The question remains: Can the sector sustain this growth in the face of ongoing economic challenges?
