China’s services activity expanded in October even though growth was the weakest in three months, a private survey showed, as holiday spending and travel by households insulated the industry from a deepening economic slowdown, reports Bloomberg. The RatingDog China services purchasing managers’ index slipped to 52.6 from 52.9 in September, according to a statement published Wednesday, extending a growth streak that started after Covid lockdowns in 2022. The median forecast of economists surveyed by Bloomberg was 52.5, with any reading above 50 indicating an expansion.
The reading adds to a picture of an industry that’s holding up relatively well despite sluggish consumer demand, even as weakness spreads across the world’s second-biggest economy. Official PMIs last week showed the services activity picked up slightly to start the fourth quarter, thanks largely to long autumn holidays and the beginning of a shopping festival in October, while manufacturing and construction both slumped.
“A solid improvement in domestic demand continued to drive the expansion of new orders,” Yao Yu, founder of RatingDog, said in the statement. “The sustained contraction in employment and pressure on profit margins remain the main constraints facing the sector.”