China's services sector grows a little less than expected in April

Growth in China’s services sector was a little weaker than expected in April, according to figures released on Friday.

The Caixin services purchasing managers’ index dipped to 56.4 from 57.8 in March, coming in below consensus expectations for a reading of 57.0. Still, it remained above the 50.0 mark that separates contraction from expansion for the fourth month in a row.

It also marked the second-highest figure recorded since November 2020.

Wang Zhe, senior economist at Caixin Insight Group, said the reading indicates that services activity is still "undergoing a fast recovery".

"There was still a lot of optimism in the services sector in April, with the reading for expectations for future activity remaining well above the neutral 50.0 level," he said, adding that "businesses continued to express confidence in a better market environment as the impact from Covid waned".

The Caixin China general manufacturing purchasing managers’ index fell to 49.5 in April from 50.0 in March. This was the first reading below 50 in three months.

Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said the services reading of 56.4 was "still red hot".

"Today’s strong Caixin index confirms the view that the services sector is leading China’s reopening revival, while the manufacturing recovery is starting to lose momentum," he said.