The Caixin/S&P Global services purchasing managers’ index (PMI) eased to 52.5 from a 52.7 in March, remaining in expansionary territory for the 16th straight month. The 50-mark separates expansion from contraction.
The Services PMI fell marginally lower to 52.5 in Apr-24 (Mar-24: 52.7), as expected by the market consensus and remaining on expansionary trend for the 16th straight months. New business expanded at the fastest pace in nearly a year, with new export business growing at the fastest pace in 10 months. However, service providers tapered their hiring for the third consecutive month in the absence of capacity pressure. In terms of price pressure, input inflation accelerated due to rising costs of input materials, labour, and energy.
The input inflation however remained below the long-term average. In contrast, albeit only marginally higher, output prices rose further to surpass the series average. Business sentiment improved to the highest level since Dec-23, reflecting rising expectations for better business conditions in the year ahead.
Overall, further advancement of China’s services sector signals better domestic demand conditions. The rising price pressure also indicated recovery from prolonged deflationary pressure. MIDF said it continues to foresee China’s economy will continue to grow in 2024, fueled by domestic demand and external trade improvements. The house expects growing demand from China will be a positive development that will support recovery in Malaysia’s external trade this year.
