FX.co ★ China Services Sector Remains in Contraction

China’s official NBS Non-Manufacturing PMI stood at 49.0 in August 2026, unchanged from July and below market expectations of 49.5, signaling a continued contraction in non-manufacturing activity. The business activity index was steady at 49.3, while the construction index slipped slightly to 46.9 from 47.0. Within services, wholesale, retail, and capital market services all remained below the 50.0 expansion threshold, whereas postal services, telecommunications, broadcasting, television and satellite transmission services, as well as internet software and IT services, continued to perform robustly.

New orders weakened further, with the index declining to 44.1 from 44.4, underscoring softer market demand. By sector, construction new orders improved to 42.4 from 40.1, while services new orders fell to 44.5 from 45.2. On the pricing front, input costs rose to 51.1 from 49.7, and sales prices climbed to 49.3 from 47.9, indicating mounting cost pressures alongside a still-subdued ability to pass these costs on. The employment index was unchanged at 45.4, suggesting ongoing labor market softness in the sector. Business expectations eased modestly to 55.0 from 55.4, but remained firmly in expansionary territory, indicating that firms are still broadly optimistic about future activity.