China services grow more slowly in sign of faltering economy

The RatingDog China services purchasing managers’ index fell to 52.1 in November, according to a statement published on Wednesday, matching the median forecast of economists surveyed by Bloomberg

China’s services activity expanded at the weakest pace in five months, a private survey showed, adding more evidence of sluggish consumer demand that’s putting further pressure on a slowing economy.

The RatingDog China services purchasing managers’ index fell to 52.1 in November, according to a statement published on Wednesday, matching the median forecast of economists surveyed by Bloomberg. Any reading above 50 indicates an expansion.

The health of the services industry may held determine if consumer spending is in jeopardy during the months ahead, as slumping housing prices and a weak jobs market hold back demand.

The official PMI survey showed services activity contracted last month for the first time since Covid lockdowns in 2022. As the boost faded from a long national holiday in October, the gauge also declined on the back of weakness in the real estate and residential services sectors.

Until now, the services sector has been a bright spot of a consumer market beset by deflation and subdued confidence.

The industry has been a focus of government efforts to revive household spending. Provincial authorities are stepping up initiatives such as giving kids fall holidays to nudge parents to splurge on travel.

The government sees untapped potential in boosting sectors including travel and entertainment as services-related expenditure in China accounts for just 21% of gross domestic product, according to estimates by Australia & New Zealand Banking Group, compared with more than 40% in the US.

The Chinese economy is expanding at a slower pace in the last quarter of the year, though its strong performance earlier in 2025 means the official growth target of around 5% is likely achievable.