China Services PMI Edges Up in May, But Growth Remains Sluggish

China’s Services Sector Shows Slight Growth in May

Services PMI Rises, But Broader Recovery Still Lags

China’s private sector services activity improved marginally in May, with the Caixin Services Purchasing Managers’ Index (PMI) climbing to 51.1 from 50.7 in April, slightly beating expectations.

A reading above 50 indicates expansion, but analysts say the modest gain highlights the sluggish pace of recovery, with demand still soft and business sentiment subdued.

Manufacturing and Composite PMIs Signal Weakness

The slight uptick in services contrasts with worrying signs from the manufacturing sector. Earlier this week, Caixin reported that its Manufacturing PMI dropped sharply to 48.3, the lowest since September 2022, down from April’s 50.4.

The Caixin Composite PMI, which blends services and manufacturing data, fell to 49.6, marking its weakest level since December 2022, and indicating contraction in the broader economy.

Explore live PMI and macro data for China in our Asia Economic Dashboard.

Outlook: More Stimulus Likely in H2 2025

Economists now anticipate further stimulus from Beijing in the second half of 2025, particularly as external demand weakens and domestic consumption remains fragile. Fiscal support, infrastructure spending, and targeted liquidity measures may be prioritized.

Related Reading: China’s Economic Stimulus Playbook – What to Expect in 2025

Key Takeaways

• Caixin Services PMI rose to 51.1 in May, from 50.7 in April.
• Manufacturing PMI dropped to 48.3, the lowest since September 2022.
• Composite PMI slipped below 50, suggesting broad economic softness.
• Expectations for policy easing and stimulus measures are increasing.