China's Services Sector Experiences Slight Growth in October Despite Soft Sales and Stagnant Employment

Amid Sluggish Sales and Static Employment, Caixin/S&P Global Services PMI sees a Slight Rise to 50.4 in October, Signalling Slow Progress in China's Services Sector.

• Despite soft sales and stagnant employment, China's services sector saw a slight growth in October, with the Caixin/S&P Global services purchasing managers’ index (PMI) rising to 50.4 from September’s nine-month low of 50.2.
• Although the services sector, which accounts for about 48% of China's jobs, recovered 90% to pre-COVID levels, it is deemed unlikely to experience a rebound beyond expectations.
• New orders in the services sector grew at the weakest pace in 10 months, undermined by sluggish household income growth and an uncertain job market.
• Overall business optimism in China slipped for the fourth month in a row, reaching its lowest point since March 2020 due to the impact of slow sales growth on companies' hiring strategies.
• China's overall economy reportedly staged better-than-expected growth in the third quarter; however, weak property sector, trending downward travel demands, local government debt and geopolitical tensions may somewhat dampen future economic outlook.

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