China’s services activity expanded at its slowest pace since July in October, as fierce competition and rising costs squeezed firms even though demand held up, a private-sector survey showed on Wednesday.
The RatingDog China General Services PMI, compiled by S&P Global, fell to 50.8 in October from 51.6 in September. The reading stayed above the 50 mark that separates expansion from contraction, but it marked the weakest services growth in three months.
The detail beneath the headline was mixed rather than uniformly weak. New business continued to grow at a rate broadly unchanged from September, and new export business rose for a sixth straight month, extending the longest growth streak in that measure since 2024. Services firms also continued to add both full-time and part-time staff to cope with existing workloads.
The pressure showed up in prices. Increased competition led firms to lower their average selling prices for a second month, although the pace of discounting eased from September, and the week-long Golden Week holiday offered little support. At the same time, input prices rose at their quickest pace in five months, driven by higher costs for materials, fuel and wages. That combination — charging less while paying more — is weighing on profitability, according to RatingDog founder Yao Yu, who said steady new business and stronger hiring still underpinned growth at the start of the fourth quarter.
Business confidence slipped to its lowest since July, with firms citing concerns over rising input prices and heightened competition. A separate composite index, which combines manufacturing and services, fell to 52.0 from 52.4, the slowest rise in private-sector output in three months.
The services result fits a broader picture of an economy losing some momentum as the final quarter begins. China’s official manufacturing survey fell into contraction in October at 49.3, while the private RatingDog manufacturing gauge still showed expansion at 52.0, and the official services measure was flat at 50.0. That followed third-quarter growth of 4.5 per cent year on year, helped by exports and solid industrial output. The services figures therefore matter well beyond one sector: services now carry much of China’s domestic demand, and a sustained loss of confidence there would make it harder for consumer spending to offset softer factory demand.
Note: the featured image is a file photo of East Nanjing Road, a shopping street in Shanghai, taken in February 2013, not a photograph from October 2026.
Sources: Reuters, “China’s services growth slows to three-month low as confidence weakens”, 4 November 2026 (https://www.reuters.com/business/finance/chinas-services-growth-slows-three-month-low-confidence-weakens-2026-11-04/); InvestingLive, “China services PMI slows to 50.8 in October as price cuts meet rising costs”, 4 November 2026 (https://investinglive.com/news/china-services-pmi-slows-to-50-8-in-october-as-price-cuts-meet-rising-costs/).
