06.52 BSTChina's services growth hits seven-month low as tariffs biteGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.Investors will be scrutinising the latest healthchecks on companies across the world today, for signs that the US-China trade war is hurting the global economy.And… the latest purchasing manager’s survey data has shown that China’s service sector activity growth has hit a seven-month low, as business confidence fell to the lowest since early in the Covid-19 pandemic.The Caixin China General Services Business Activity Index, released this morning, fell to 50.7 in April, down from 51.9 in March. That shows the slowest rise in activity since last September – but still above the 50-point mark that signals stagnation.China’s service sector firms reported a slowdown in new business, while business sentiment fell to the lowest level seen since February 2020, while companies continued to cut staffing levels.The report says:
The slowdown in business activity growth reflected the trend seen for new business. Disruptions to goods trade amid fresh tariffs had negatively impacted some service providers in April, according to anecdotal evidence, and led to the slowest rise in overall new work for 28 months.
New export business increased only fractionally, with some firms noting improved foreign demand amid rising tourism activity.
🇨🇳 China’s services activity deteriorated more than expected in April, the latest setback for its economy.The Caixin China services PMI fell to 50.7, the lowest level in seven months.https://t.co/j5RVTQqi36 pic.twitter.com/ViDpgQLk89— Jack Hoogland (@jack_hoogland) May 6, 2025Data yesterday showed that the US services sector’s growth picked up in April, while the prices paid by American firms for materials and services jumped, indicating that the tariffs announced by the Trump administration are fuelling inflation.The financial markets are looking for progress in trade talks between the US and its trading partners. Yesterday, treasury secretary Scott Bessent told CNBC that he believes the U.S. is “very close to some deals.”Bessent explained:
“As President Trump said last night on Air Force One, maybe as early as this week.”
He added that there could be “substantial progress in the coming weeks” with China; last week, Beijing signalled it was “assessing” potential trade talks with the U.S….The agenda
9am BST: UK car sales data for April
9am BST: Eurozone services sector PMI report for April
9.30am BST: UK services sector PMI report for April
3.10pm BST: US RCM/TIPP Economic Optimism Index
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