China’s service sector experiences accelerated growth in March due to an increase in new business, reaching its fastest pace in 3 months.

Boost in New Business Expansion Drives Business Confidence, While Employment Levels Shrink Amid Pandemic Uncertainty

In March, new business expansion reached its fastest rate since December thanks to improving underlying demand and efforts to boost new orders. This increase in new business also contributed to a rise in business confidence, with the subindex of future activity increasing for the first time in three months. Hopes for new product lines, expansion plans, and higher client budgets were cited as factors that could help boost sales.

Despite this positive development, employment levels continued to shrink for a second consecutive month. However, the rate of job shedding eased from February. Resignations among staff and redundancies aimed at improving productivity were identified as reasons for the decrease in payroll numbers.

Both the manufacturing and services sectors saw accelerated growth in supply and demand, with improved exports and sustained market optimism. This positive trend was reflected in the composite PMI rising to 52.7 last month from 52.5 in February, marking the highest reading since May 2023. Economist Wang Zhe noted that while employment continued to contract in both sectors, input and output prices remained low, suggesting that sluggish demand persisted.

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