China services activity grows at faster rate in April, private PMI shows

* Private PMI shows faster services growth, contrasts with official survey's contraction

* Domestic demand drives new business, but export orders and staffing levels decline

* Input costs rise while firms cut prices to retain clients

By Liangping Gao and Ryan Woo

BEIJING, May 6 (Reuters) - China's services activity expanded at a faster pace in April, helped by stronger growth in new business, although overseas demand continued to decline, a private-sector survey showed on Wednesday.

The RatingDog China General Services purchasing managers' index, compiled by S&P Global, rose to 52.6 in April from 52.1 in March, staying above the 50-mark that separates expansion from contraction.

The reading contrasted with an official survey released last week, which showed services activity slipping back into contraction after expanding the previous month. The two surveys cover different samples.

China's export engine has shown signs of strain, while retail sales and industrial output have cooled. Producer prices have also emerged from a years-long deflationary stretch, a shift analysts say could squeeze companies already facing higher costs and limited pricing power amid weak demand.

External risks are adding to the pressure. The war in the Middle East has heightened uncertainty over global demand and supply chains, threatening to further erode margins for Chinese firms grappling with soft orders and cautious spending by households and businesses.

New business rose at a faster pace in April, driven mainly by domestic demand. New export business declined for a second straight month, though only marginally.

Service providers cut staffing levels for a third consecutive month, citing retirement, resignations and cost-saving measures. Outstanding business remained in expansion territory, continuing a trend seen since October 2025.

Input cost inflation accelerated to its highest so far this year, with firms pointing to firmer oil, fuel and freight costs from the Middle East conflict. Companies reduced their selling prices for a second month to help attract and retain clients.

Business confidence about activity over the coming year remained positive in April.

The Composite Output Index rose to 53.1 in April from 51.5 in March, remaining above the 50.0 no-change threshold. (Reporting by Liangping Gao and Ryan Woo; ; Editing by Jacqueline Wong)