China’s RatingDog PMIs Climb in August as Services Activity and Hiring Gain Ground

China’s private sector recorded stronger growth in August, with the RatingDog Services PMI advancing from 50.4 in July to 51.4, while the Composite PMI rose from 50.8 to 52.1. Service-sector activity expanded at a quicker, though still measured, pace, supported by an acceleration in new business growth following July’s four-month low. The improvement was largely driven by domestic demand, even as new export orders continued to rise at a more moderate pace.

Labor-market signals turned notably more positive. Services employment increased for a fourth consecutive month, marking the longest sustained hiring streak since 2023 and one of the strongest expansions recorded over the past three years. At the composite level, employment also expanded for a fourth straight month, representing the longest sequence of private-sector job gains in over five and a half years. Backlogs continued to accumulate, though at a slower rate as firms expanded capacity, while overall business confidence strengthened.

Price pressures remained subdued despite a mild uptick in input costs. Services input inflation quickened from July but stayed modest, and output prices rose only marginally for a third successive month. At the composite level, selling-price inflation eased to its weakest pace since January. Taken together, the August figures point to a broader improvement in Chinese private-sector activity, underpinned by firmer domestic demand and sustained hiring, though softer export momentum and limited pricing power suggest the recovery still warrants a cautious interpretation.

Data Summary

Indicator
August
July
Trend

RatingDog PMI Services
51.4
50.4
Growth accelerated

RatingDog PMI Composite
52.1
50.8
Growth accelerated

Components

Component
Trend

Services business activity
Faster, but still modest expansion

Services new business
Rose for 44th straight month; growth accelerated

Services new export business
Rose for fourth straight month, but at slower pace

Services employment
Rose for fourth straight month; longest run since 2023

Services backlogs
Rose for tenth straight month; slowest increase since April

Services business confidence
Improved from July but remained below 2026 average

Services input prices
Inflation edged higher but remained modest

Services output prices
Rose marginally for third straight month

Composite output
Faster expansion across manufacturing and services

Composite new business
Growth accelerated across both sectors

Composite employment
Rose for fourth straight month; longest run in over five-and-a-half years

Composite output prices
Inflation slowed to weakest pace since January

Key Takeaways

• China’s PMI Services rose from 50.4 to 51.4, indicating a faster though still moderate expansion in August.
• PMI Composite climbed from 50.8 to 52.1, as both manufacturing and services recorded stronger output and new business growth.
• Domestic demand was the main driver of stronger services activity, while export business continued to expand but lost momentum.
• Services employment increased for a fourth straight month, the longest sequence since 2023, while composite employment posted its longest run of growth in more than five and a half years.
• Business confidence improved from July, although it remained below the 2026 average.
• Price pressures stayed contained: input costs rose modestly, while composite selling-price inflation slowed to its weakest pace since January.
• Overall, the August survey points to broader private-sector improvement, but softer export momentum and limited pricing power still argue for a restrained interpretation.

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