The latest Caixin survey reveals that China's services sector experienced accelerated growth in October, posting a PMI score of 52.0. This marks an increase from September's 50.3, moving further above the threshold for expansion versus contraction.
The sector's expansion is driven by enhanced underlying demand and improved market conditions, fueling an increase in new business inflows. Notably, this is the first rise in the rate of expansion in four months, albeit modest in scope. The growth in new work is bolstered by a robust uptick in export business, thanks in part to consistent business development strategies and heightened interest from foreign markets, including the US.
However, the services sector is experiencing capacity pressures. Despite the accelerated growth in service activities, backlogs have once again accumulated, slightly outpacing September's rates.
