China’s services activity expanded at the fastest pace in three months in October, helped by early signs that Beijing’s big stimulus push was helping improve business conditions, a private-sector survey showed on Tuesday. The Caixin/S&P Global services purchasing managers’ index (PMI) grew to 52.0 in October from 50.3 the previous month.
Activities in China’s services sector expanded faster in Oct-24 as the Caixin Services PMI increased to 52.0 (Sep-24: 50.3), the highest reading in 3 months. The robust growth was underpinned by improvements in both supply and demand, coupled with better overall market conditions. Partly due to a rise in export orders, new business activity increased for the 22nd consecutive month, resulting in increased capacity pressure and backlog of works. As a result, employment also increased, albeit marginally. Meanwhile, cost pressures slowed as input price inflation moderated to 3-month low, although companies indicated higher costs of input material and energy.
On another note, MIDF said the selling prices stabilised after 2 months of declines. Sentiment among services providers remained positive and rebounded to 5-month high as sales are expected to grow amid improving market conditions. Encompassing both manufacturing and services sectors, the Composite Output Index increased to 51.9 in Oct-24 (Sep-24: 50.3) at its fastest pace in four months. The improvement in PMIs in Oct-24 is an encouraging development, signalling positive effect from the stimulus measures announced by the government. Firms may continue to increase production in view of better demand outlook.
The house anticipates positive impact to Malaysia’s trade outlook given China’s importance as one of major export markets. Nonetheless, any new sign of slowing growth momentum may require more policy supports from China’s government to ensure the +5% growth target will be achieved this year.
