China’s Service Sector Growth Accelerates in July Thanks to Summer Travel

A spike in summer travel helped boost China’s services sector in July, the Caixin PMI released Thursday showed, somewhat countering the drag from the poor manufacturing sector.

The services sector has seen seven consecutive months of growth as measured by the Caixin/S&P Global purchasing managers’ index (PMI), which increased to 54.1 in July from 53.9 in June. Expansion and contraction in activity are separated by the 50-point threshold.

The figures contradicted a Monday government survey that showed services activity had continued to soften. Analysts said the difference could be a result of the diverse make-ups of the surveyed companies and the varying research methodology used.

Analysts opined that summer travel may have boosted related consumption, despite sales of certain high-priced items remained sluggish, resulting in a divided retail sales picture for July.

The Caixin/S&P composite PMI, which takes into account both manufacturing and services, decreased to 51.9 in July from 52.5 in June, representing the seventh consecutive month of growth. However, this expansion was at its slowest pace since January.