China services PMI falls as trade wars hammers business confidence
By Benjamin Chiou
Date: Tuesday 06 May 2025
(Sharecast News) - Economic activity growth across China's services sector slowed to its lowest level in seven months in April, as Washington DC's trade war impacted levels of new business.
The closely followed Caixin services purchasing managers' index fell to 50.7 last month, down from 51.9 in March and well below the 51.7 reading expected by a consensus of analysts.
This was the 28 straight month of a reading above 50 - which separates growth from contraction - but the lowest print since September.
According to Caixin, business sentiment levels fell to their lowest since February 2020 - when effects of the first Covid outbreak were felt in China - and the second-lowest reading recorded since data collection began in November 2005.
Meanwhile, the weaker outlook prompted service providers to drop rates despite a pickup in cost inflation during the month.
"In April, supply and demand grew at a slower pace than the previous month. Market improvements were limited amid the China-US trade row," explained Wang Zhe, senior economist at Caixin Insight Group.
"Service providers cut prices charged to customers to boost sales amid tepid demand and fierce market competition, resulting in a third straight monthly drop in prices charged."
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