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Investing.com-- China’s services sector grew slightly more than expected in October, private purchasing managers index data showed on Wednesday, although growth still cooled from the prior month amid sustained headwinds for the economy.
The RatingDog services PMI read 52.6 in October, just above estimates of 52.5 but below September’s reading of 52.9.
The softer print was driven chiefly by a drop in exports, while staffing levels declined and output prices remained weak.
China’s services sector has now remained in expansion since January 2023, remaining a bright spot in an otherwise steadily cooling economy. Wednesday’s PMI data comes just days after government PMI data showed further contraction in manufacturing activity.
The RatingDog data showed export industries contracted in October due to renewed trade tensions between the U.S. and China, although these tensions are expected to ease after the two agreed to a new trade deal last week.
“Although complex trade conditions inhibited export business, a solid improvement in domestic demand continued to drive the expansion of new orders. The sustained contraction in employment and pressure on profit margins remain the main constraints facing the sector,” Yao Yu, founder at RatingDog said in a note.
China’s economy is grappling with sustained deflation, high U.S. trade tariffs, and waning support from government stimulus measures. October’s PMI readings underscored the need for more supportive measures from Beijing.
Government officials had vowed to unlock more stimulus during a top-level meeting in late-October, with markets now awaiting more cues on that front.