China’s private-sector growth strengthened in August, with RatingDog PMI Services rising from 50.4 in July to 51.4, while PMI Composite climbed from 50.8 to 52.1. Services activity expanded at a faster, though still moderate, pace, while new business growth accelerated from July’s four-month low. Domestic demand was main driver, while new export business continued to rise but at a slower pace.
Labour-market indicators were more encouraging. Services employment increased for a fourth consecutive month, longest sequence since 2023, with hiring growth among strongest seen in past three years. At composite level, employment also rose for a fourth month, marking longest run of private-sector job growth in more than five-and-a-half years. Backlogs continued to increase, although more slowly as firms expanded capacity, while business confidence improved from July.
Price pressures remained contained despite a slight pickup in costs. Services input inflation accelerated from July but stayed modest, while output prices rose only marginally for a third straight month. At composite level, selling-price inflation slowed to weakest pace since January. Overall, August data point to a broader improvement in Chinese private-sector activity, led by firmer domestic demand and sustained hiring, while softer export momentum and still-moderate pricing power temper the strength of recovery.
Data Summary
| Indicator | August | July | Trend |
|---|---|---|---|
| RatingDog PMI Services | 51.4 | 50.4 | Growth accelerated |
| RatingDog PMI Composite | 52.1 | 50.8 | Growth accelerated |
Components
| Component | Trend |
|---|---|
| Services business activity | Faster, but still modest expansion |
| Services new business | Rose for 44th straight month; growth accelerated |
| Services new export business | Rose for fourth straight month, but at slower pace |
| Services employment | Rose for fourth straight month; longest run since 2023 |
| Services backlogs | Rose for tenth straight month; slowest increase since April |
| Services business confidence | Improved from July but remained below 2026 average |
| Services input prices | Inflation edged higher but remained modest |
| Services output prices | Rose marginally for third straight month |
| Composite output | Faster expansion across manufacturing and services |
| Composite new business | Growth accelerated across both sectors |
| Composite employment | Rose for fourth straight month; longest run in over five-and-a-half years |
| Composite output prices | Inflation slowed to weakest pace since January |
Key Takeaways
- China PMI Services rose from 50.4 to 51.4, indicating a faster though still moderate expansion in August.
- PMI Composite climbed from 50.8 to 52.1, as both manufacturing and services recorded stronger output and new business growth.
- Domestic demand was main driver of stronger services activity, while export business continued to expand but lost momentum.
- Services employment increased for a fourth straight month, longest sequence since 2023, while composite employment posted its longest run of growth in more than five-and-a-half years.
- Business confidence improved from July, although it remained below 2026 average.
- Price pressures stayed contained: input costs rose modestly, while composite selling-price inflation slowed to weakest pace since January.
- Overall, August survey points to broader private-sector improvement, but softer export momentum and limited pricing power still argue for a restrained interpretation.
