China May Caixin Services PMI 52.8 Vs 51.5 in April

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Activity in China's service sector expanded at a faster pace in May, a private gauge showed Monday, indicating renewed momentum in the sector after a deceleration in the previous four months.

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The Caixin services purchasing managers' index rose to 52.8 in May from 51.5 in April, Caixin Media Co. and research firm Markit said. An official gauge released Wednesday also pointed to a faster expansion in the sector.

A reading above 50 indicates an expansion in activity from the previous month, while a level below that points to a contraction.

"The improvement in the services sector bolstered the Chinese economy in May," said Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group.

The new business sub-index hit the highest level since December while input costs sub-index signalled stronger cost pressure, said Caixin.

"However, the rapid deterioration in the manufacturing industry is worrying. We need to closely monitor whether the diverging trends in manufacturing and services will widen further," he said.

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China's official nonmanufacturing PMI rose to 54.5 in May from 54.0 in April, the National Bureau of Statistics said Wednesday. Unlike the Caixin index, the official measure also includes the construction sector.

Write to Grace Zhu at grace.zhu@wsj.com

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June 04, 2017 22:11 ET (02:11 GMT)