BEIJING (Reuters) - China's services sector expansion slowed in May, a private sector survey showed on Thursday, with weaker overseas demand and increased costs putting pressure on businesses.
The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 55.1 in May, down from 56.3 in April but still well in expansionary territory. The 50-mark separates growth from contraction on a monthly basis.
The survey attributed part of the slowing expansion to a fall in overseas demand as COVID cases abroad hurt business activity. A gauge of export orders slipped into contraction.
The Caixin PMI contrasts with an official survey released earlier this week, which showed activity in China's services sector expanded at a faster pace in May.
Though slower to recover from the epidemic than manufacturing, a gradual improvement in consumption has stimulated activity in China's services sector, which includes many smaller and private companies.
Growth in total new orders slipped and services firms increased their staffing levels for the third straight month, but at a slower pace, the Caixin survey showed.
Inflation pressures worsened with input costs rising at a sharper rate in May and reports of more expensive raw materials, energy, staff and transport, the survey found.
Even though firms were able to raise selling prices for the 10th straight month, the increases have yet to catch up with the inflation in input costs.
"Services supply and demand continued their upward trends for the 13th consecutive month, though both expanded at a slower pace than in the previous month," said Wang Zhe, senior economist at Caixin Insight Group, in a statement accompanying the data release.
"Inflationary pressure was enormous as price gauges continued to rise. Both the measures for input costs and the prices service providers charged rose to their highest points of the year."
The Caixin China General Composite PMI came in at 53.8 in May, weaker than 54.7 the previous month.
(Reporting by Gabriel Crossley; Editing by Sam Holmes)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU