China's services sector expanded at a weaker pace in March, according to a private survey, signaling a slowdown in consumer demand after a temporary boost from the long national holiday in February. The Caixin China General Services Purchasing Managers' Index fell to 52.5 from 52.7 in February, marking the second consecutive month of expansion but at a reduced rate.

The decline suggests the Lunar New Year holiday's positive impact on services activity was short-lived, with businesses reporting weaker growth in new orders and business activity. The survey highlights ongoing challenges for China's economy as it attempts to shift toward consumption-driven growth. Service providers noted increased competition and pricing pressures, while employment in the sector remained stable.

Despite the slowdown, the services sector continues to expand, albeit at a modest pace. The data underscores the uneven recovery in China's economy, with services showing resilience but facing headwinds from subdued consumer confidence and ongoing structural challenges. Analysts suggest policymakers may need to implement additional stimulus measures to support sustained growth in the services sector.