China’s RatingDog services PMI rose to 52.6 in April from 52.1 in March, with domestic demand driving a fortieth successive month of new order growth, while the composite PMI climbed to 53.1
Summary:
- The RatingDog China General Services Business Activity Index rose to 52.6 in April from 52.1 in March, signalling a faster rate of expansion, according to the PMI release compiled by S&P Global
- New orders rose for the fortieth consecutive month, the second-longest continuous expansion in the survey’s history, with domestic markets the primary driver, per the report
- New export business declined for a second successive month, though the pace of contraction eased from March, according to the release
- Input cost inflation accelerated to its highest level in 2026 so far, with survey respondents widely attributing higher costs to rising oil and fuel prices linked to the Middle East conflict, per the PMI data
- Service providers reduced their average selling prices for the fourth time in five months, keeping charges in contraction territory for a second consecutive month, according to the release
- The Composite PMI Output Index, covering both manufacturing and services, rose to 53.1 in April from 51.5 in March, the second-fastest rate of expansion since May 2024, per S&P Global
China’s services sector expanded at a faster pace in April, with the RatingDog China General Services Business Activity Index climbing to 52.6 from 52.1 in March, according to the latest PMI survey compiled by S&P Global, as solid domestic demand and improving business confidence drove the acceleration at the start of the second quarter.
New orders rose for the fortieth consecutive month, the second-longest unbroken expansion in the survey’s history, with the rate of growth picking up for the third time in four months to broadly match the average pace recorded over the past year. Domestic markets remained the primary engine of demand, however, as new export business fell for a second straight month, reflecting the disruption to global trade flows that has intensified since the outbreak of the Middle East conflict in late February.
Business sentiment also improved, with confidence about activity over the coming twelve months among the strongest recorded over the past year. Firms cited new project pipelines, market expansion and efficiency gains as the basis for their optimism, suggesting underlying conviction in the domestic recovery narrative remains intact despite the external uncertainties.
On costs, input price inflation accelerated to its highest point in 2026, with survey respondents widely attributing the increase to rising oil and fuel prices flowing from the Middle East war. Despite the quickening pace, overall cost pressures remained modest and below the long-run survey average, giving service providers room to continue trimming their selling prices. Average charges fell for the fourth time in five months, keeping the selling prices index in contraction territory for a second consecutive month as firms prioritised competitiveness.
Employment edged lower for a third consecutive month, though the decline was marginal, with companies citing retirements, resignations and cost-saving measures alongside the modest rise in outstanding workloads.
At the composite level, the picture was similarly encouraging. The Composite PMI Output Index, which combines manufacturing and services activity, rose to 53.1 in April from 51.5 in March, its second-fastest reading since May 2024, with both sectors contributing to the improvement. Input prices at the composite level rose at the fastest rate since April 2022, driven primarily by manufacturing, while charge inflation reached a 31-month high.
RatingDog founder Yao Yu noted that the sustainability of the expansion would depend on the continued resilience of domestic demand, a caveat that carries particular weight given the ongoing uncertainty surrounding the Middle East conflict and its capacity to further disrupt global supply chains and energy costs in the months ahead.
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The acceleration in China’s services PMI, driven by domestic demand rather than exports, offers a partial buffer against the trade disruption flowing from the Middle East conflict and global tariff uncertainty, but the decline in export new business for a second consecutive month signals that external headwinds are already biting. The rise in input cost inflation to its highest level of 2026, explicitly linked to oil and fuel prices from the Middle East war, underscores that the conflict’s inflationary transmission into the world’s second-largest economy is broadening beyond manufacturing into the services sector
