The S&P Global PMI composite index for China fell to 50.8 in July from 51.3 in June, indicating more subdued conditions in the aggregate economy. The business activity index for China's services sector, also published today, increased to 52.6 in July from 50.6 in June, whereas the headline index for the manufacturing PMI survey, published last week, showed renewed expansion in the sector after previous contraction. Official PMI survey data modest contraction in the manufacturing sector and modest expansion in the non-manufacturing sector in July.

Respondents to today's service sector survey reported stronger growth in output and new orders in July and an increase in new export orders after two consecutive declines. The survey showed payrolls were increased at the fastest pace since July 2024 while its measure of confidence picked up to a four-month high, perhaps indicating optimism that global trade tensions will ease. Respondents also reported a marginal increase in input costs and the first increase in selling prices in six months.

Today's data were stronger than consensus forecast of 50.4 for the survey's services index. The China RPI and the RPI-P both rose from minus 29 and minus 21, indicating that recent Chinese data in sum are coming in slightly below consensus forecasts.

The S&P Global purchasing mangers index data for China is expected to show the PMI for the services sector edged down further to 50.4 in July after slumping to 50.6 in June from May’s 51.1. The composite PMI is seen slipping to 51.1 after surging to 51.3 the previous month from 49.6 in May.

The S&P China Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.

The S&P China Composite PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, and is based on original survey data collected from a representative panel of over 800 companies based in the Chinese manufacturing and service sectors.

The PMIs have developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indexes are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.