Growth in China’s services sector fell to a four-month low in June over a decline in new orders from international consumers. The services PMI reading in June came in at 52.0, lower than May’s reading of 52.7 but still over the 50-threshold indicating expansion.
June’s services PMI was the lowest level since February, driven by a decline in new export orders received by Chinese companies. This data contracted for the first time in nine months, as a result of the ongoing trade war between US and China and an overall subdued demand globally.
On the positive side, the new business index in the services sector grew to 53.4 in June from 52.9 previously. Business confidence has also grown among Chinese companies, rising from a 10-month low touched in May. But the trade war continues to weigh on the business sentiment as negotiations progress.
The slightly positive data from the services sector offers some hope about the Chinese economy amid weakening manufacturing a fall in exports.