China’s services activity accelerates at quickest pace in 10 months in May,

China’s services activity in May accelerated at the quickest pace in 10 months, while staffing levels expanded for the first time since January, a private sector survey showed on Wednesday, pointing to sustained recovery in the second quarter.

The Caixin/S&P’s composite PMI, which tracks both the services and manufacturing sectors, rose to 54.1 last month from 52.8 in April, the highest in a year.

Faster new business inflows underpinned services activity growth. New business increased at the quickest pace since May 2023, as did new export business.

Additional staff were hired last month to cope with ongoing workload according to respondents, pushing up staffing levels to their highest since September.

Price pressures intensified, however, with firms raising their charges amid rising cost burdens.

Business confidence levels also eased to a seven-month low amid concerns about the global economic environment and rising prices.

But a protracted property downturn has weighed on any meaningful economic rebound.

Nomura analysts on Monday said “growth momentum has remained tepid in general, especially for domestic demand, as developer contract sales remain in deep contraction”.

But in light of the export strength, the Japanese investment bank revised up China’s 2024 gross domestic product growth forecast to 4.5 per cent from 4.3 per cent.