The Caixin Services Purchasing Managers’ Index (PMI) fell from 51.9 in March to 50.7 in April, hitting a new low since October 2024. This figure is significantly lower than the median forecast of 51.8 by economists surveyed by Bloomberg.
According to reports from Caixin Media and S&P Global on Tuesday, the Caixin Services PMI recorded 50.7, a decrease of 1.2 percentage points from March, dropping to its lowest level in seven months within the expansion zone.
The previously released April Caixin China Manufacturing PMI decreased by 0.8 percentage points to 50.4, the lowest since February. Both the services and manufacturing sectors witnessed a decline in business activity, with the Composite PMI output index for the month dropping by 0.7 points to 51.1, indicating a slowdown in domestic business production and operations.
Looking at the detailed data, the expansion of supply and demand in the services sector slowed simultaneously in April. The new orders index for the month fell to just above the critical threshold, marking the lowest level of growth in nearly 28 months.
Caixin reported that in an unfavorable market environment, employment in the service industry continued to contract. Employment in the service industry shrank for the second consecutive month in April, marking the fourth contraction in the past five months.
With rising raw material costs and labor expenses, companies have had to continue lowering prices to promote sales amidst weak demand. The sales price index has been below the critical threshold for three consecutive months, putting pressure on business profits.
Service providers’ confidence has been significantly impacted by tariff disruptions, with the business expectation index in April dropping noticeably within the expansion zone. Confidence fell to its second-lowest level since data collection began in November 2005, only higher than the level in February 2020 amid the pandemic.
The cooling of service activities reflected in the Caixin PMI aligns with the trend of the official non-manufacturing PMI. Recent data released by the National Bureau of Statistics of China showed that the service industry PMI for April decreased by 0.2 percentage points to 50.1.
Caixin PMI is considered to be more reflective of trends among export-oriented enterprises and small businesses.