China's services sector showed a significant divergence in April 2026 between private and official data, as reported on Wednesday, May 6, 2026.
Latest Data Points
- Caixin/S&P Global Services PMI: Rose to 52.6 in April, up from 52.1 in March. This beat market expectations of 52.0 and marked the 40th consecutive month of expansion for the private-sector survey.
- Official NBS Non-Manufacturing PMI: Conversely, the government’s survey fell to 49.4 in April from 50.1 in March. This reading signifies a renewed contraction (any figure below 50.0) in the broader services and construction sectors.
- Composite Output Index: The Caixin private composite index (combining manufacturing and services) climbed to 53.1 from 51.5, suggesting overall private-sector resilience.
Key Trends & Drivers
- Domestic vs. Export Demand: Growth was primarily fueled by domestic demand and new project launches. New export orders declined for a second straight month, though the rate of decline eased compared to March.
- Cost Pressures: Input price inflation accelerated to its highest level in 2026 so far, largely driven by rising energy, oil, and freight costs attributed to ongoing Middle East tensions.
- Labor Market: Employment in the service sector remained a weak spot, declining fractionally for the third month in a row as firms cited cost-saving measures and restructuring.
- Business Sentiment: Despite current headwinds, business confidence remained high, reaching levels among the strongest recorded over the past year.
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