CN: PMI Composite

Mon Jan 05 19:45:00 CST 2015

Actual Previous
Composite - Level 51.4 51.1
Services - Level 53.4 53.0

December composite PMI which covers both manufacturing and services signaled increased business activity for the eighth successive month. Furthermore, the rate of expansion quickened slightly from November, with the composite output index posting at 51.4, up from 51.1 in November. The improvement was a result of stronger activity growth at service providers and a weaker contraction of manufacturing production in December. It was the quickest expansion of service sector activity for three months with a reading of 53.4, up from 53.0 in November.

Service providers saw a further solid rise in new business volumes, with the rate of growth down only slightly from November's two-and-a-half year peak. Panelists suggested that a combination of promotional activities and increased market activity helped to boost new workloads. In contrast, manufacturers saw a renewed decline in total new orders placed at their units, albeit only marginal. Consequently, composite new business increased at a modest pace that was the slowest since May.

Staffing levels at service sector companies increased for the sixteenth successive month in December. Moreover, the rate of job creation ticked up to the highest in 18 months. Meanwhile, manufacturers continued to shed staff in line with reduced workloads. That said, the rate of job shedding eased to a marginal pace that was the weakest in five months.

The HSBC China Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private service sector companies. The panel has been carefully selected to accurately replicate the true structure of the services economy.

The HSBC China Composite PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, and is based on original survey data collected from a representative panel of over 800 companies based in the Chinese manufacturing and service sectors.

The PMIs have developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indexes are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.