China services activity slows in October as costs and competition weigh on confidence

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Ivan Andriyenko

04.11.2026

China services activity slows in October as costs and competition weigh on confidence — China services growth slows

China's services sector loses momentum in October, with growth easing to its weakest pace in three months as companies face intense competition and higher operating costs. The slowdown still leaves activity in expansion territory, but softer sentiment points to growing pressure on service providers across the economy.

Highlights

RatingDog China General Services PMI drops to 50.8 in October from 51.6 in September, marking the weakest result since July.
Service providers reduce average selling prices for a second consecutive month as rising competition and higher input costs constrain margins.
Business confidence in the services sector hits a low since July, with firms citing intensified margin pressure and ongoing cost increases despite steady hiring and export growth.

October PMI signals softer services momentum

As reported by Reuters, a private-sector survey shows the RatingDog China General Services PMI falls to 50.8 in October from 51.6 in September. The reading stays above the 50-point threshold that separates growth from contraction, but marks the weakest result since July.

New business continues to grow at a pace broadly unchanged from September, while new export business rises for a sixth straight month. Service providers also continue adding full-time and part-time staff to manage existing workloads.

At the same time, firms cut average selling prices for a second month as stronger competition weighs on pricing power. The week-long Golden Week holiday provides little support, while input prices increase at the quickest pace in five months, driven by higher material, fuel and wage costs.

Confidence weakens under margin pressure

Business confidence slips to its lowest level since July, with companies citing concern about rising input costs and heightened competition. The combination suggests service-sector operators are still seeing demand growth, but are finding it harder to protect margins.

The October reading adds to signs that parts of China's domestic economy remain under pressure even as export-related services show resilience. For the broader services sector, continued hiring and expanding export business offer some support, but weaker sentiment may limit momentum if cost pressures persist.

In our earlier article on China’s third-quarter growth outlook and the latest policy support measures, we highlighted forecasts for only a modest GDP pickup despite targeted rate cuts, mortgage subsidies, and added local-government debt capacity. We also noted that solid exports and factory output were helping offset weak consumption, subdued private investment, and ongoing property-sector stress—leaving the recovery uneven and still reliant on external demand.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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