2025.05.0605:12:00UTC+00China Service Sector Growth Softens In April

China's service sector grew at the slowest pace in seven months in April as disruptions to goods trade amid fresh tariffs negatively impacted new work of some service providers, survey data from S&P Global revealed Tuesday.

The Caixin Services Purchasing Managers' Index fell to 50.7 in April from 51.9 in March. The reading was forecast to drop moderately to 51.7.

The score suggested that the sector continued to expand for 28 straight months. However, the pace of growth eased to the softest since last September.

New work logged its slowest growth in 28 months in April. New export business grew only fractionally with some firms reported improved foreign demand amid rising tourism activity.

Business confidence among service providers dropped to the second-lowest level since November 2005.

Firms reduced their staffing level for the second straight month amid concerns about costs. An increase in sales coupled with tariff-related uncertainty resulted in the first accumulation of outstanding business in four months.

Regarding prices, input costs continued to rise in April. Despite reductions to staffing levels, higher wage costs pushed up expenses. Input price inflation was the strongest since January.

Despite higher costs, service providers lowered their average output charges for the third month in a row. Firms offered discounts and lowered their charges to support sales as market competition had intensified.

The survey showed that overall private sector activity grew at the slowest pace in three months. The composite output index posted 51.1 in April, down from 51.8 in March.

The slowdown reflected softer increases in output across both the manufacturing and service sectors.