China services activity rises at faster pace in July

China's services sector expanded at a faster pace in July, but a contraction in manufacturing weighed on overall business activity, S&P Global reported Tuesday.

The S&P Global China composite purchasing managers' index fell to 50.8 in July, down from 51.3 in June.

A reading above the 50.0 neutral mark indicates an overall increase in business activity from the previous month, while a reading below signals a contraction.

The services PMI rose to 52.6 in July, up from 50.6 in June and above the FXStreet-cited consensus forecast of 50.2.

Jingyi Pan, economics associate director at S&P Global Market Intelligence, said: "the service sector grew at an accelerated pace going into the second half of the year. Better demand conditions underpinned the latest rise in activity, and this had notably included firmer external demand, as highlighted by the first expansion in new export business in three months.

"It was positive to see business sentiment recovering further, with the overall level of confidence the highest since March amid hopes that both global economic and trade conditions will strengthen in the coming months. A renewed rise in employment also reflected Chinese service providers’ optimism regarding future output, though many of these additional workers were reported to be on a part-time basis."

On Friday, S&P Global reported that the China manufacturing PMI fell to 49.5 in July, down from 50.4 in June and below the consensus forecast of 50.3.

S&P Global compiles the PMI figures each month using survey responses from a panel of around 650 services companies and 650 manufacturers, both private and state-owned. The composite figure is a weighted average of the services and manufacturing indices.