China services sector growth slows to three-month low in October
The RatingDog China General Services Purchasing Managers' Index fell to 50.8 in October as rising costs and competition impacted businesses.
China's services sector grew at its slowest rate in three months during October, according to a Reuters report cited by The Economic Times. The RatingDog China General Services Purchasing Managers' Index (PMI) dropped to 50.8 in October from 51.6 in September.
While the index remains above the 50-mark threshold that distinguishes expansion from contraction, the reading is the weakest since July. New business expansion remained largely consistent with September levels, though new export business grew for the sixth straight month.
Services companies continued to hire full-time and part-time staff to handle workloads. However, intensifying competition led firms to lower average selling prices for the second month in a row. Additionally, input prices rose at their quickest pace in five months due to higher wages, fuel, and material costs.
Business confidence reached its lowest point since July. Companies expressed concerns regarding heightened competition and increasing operating expenses, which could squeeze profit margins across the industry.
The slowdown may affect sentiment for Chinese equities, particularly consumer-facing sectors such as retail, travel, hospitality, and leisure. Technology and internet companies may also face margin pressures. The data could influence sentiment regarding Hong Kong-listed Chinese companies and the Shanghai and Shenzhen markets.
