Business activity growth in China reached a four-month high in August as service firms recorded higher new orders, though foreign sales at manufacturers continued to suffer from escalating trade tensions, according to data from Caixin and IHS Markit.
The Caixin China Composite Output Index rose to 51.6 in August from 50.9 in July to mark its fastest pace of increase since April. The services business activity index improved to 52.1 from 51.6.
At the composite level, new order growth rose at the fastest pace in four months, led by the service industry. Foreign sales rose at services companies but were down at manufacturers, which saw the sharpest drop in new orders from abroad since November 2018.
"The decline in overseas demand reflected the adverse shock of the Sino-U.S. trade conflict," said Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group.
Employers increased headcounts for the first time since April, with companies linking payroll growth to rising business requirements and an improving market outlook, the report said.
The degree of optimism among firms was little changed as a decline in manufacturers' output expectations offset an improvement in the service sector's confidence.
