China's service activities expand at slowest pace in 8 months

The world’s second-largest economy, China, saw its services activity expand at its slowest pace in eight months in August, amid weak demand and a lack of stimulus to consumption. The Caixin/S&P Global Services Purchasing Managers’ Index (PMI) fell to 51.8 in August from 54.1 in July. That was the lowest since December, when Covid-19 confined many consumers to their homes. The 50-point level on the index separates expansion from contraction. The data is broadly in line with last week’s official services PMI, which showed the sector continuing its downtrend. Even record rail trips and toll earnings over the summer months failed to boost the data. Although the official and Caixin manufacturing PMIs beat market expectations and rose from July to August, the slowdown in services activity due to weak demand and a pullback in the property market is still weighing on the economy. The Caixin/S&P composite PMI, which includes both manufacturing and services activity, fell to 51.7 from 51.9 in July, marking an eighth straight month of expansion although it was the weakest since January.