CN: PMI Composite

Thu Apr 02 20:45:00 CDT 2015

Actual Previous
Composite - Level 51.8 51.8
Services - Level 52.3 52.0

March composite PMI which covers both manufacturing and services reading was unchanged at a five month high of 51.8 pointing to increased business activity across China for the eleventh successive month in March. The rate of growth remained modest overall. The further modest increase in total business activity was driven by further expansions of output across both service providers and manufacturers in March. However, growth eased slightly at manufacturers but edged up to a three-month high at services companies. The services business activity index edged up to 52.3 from 52.0 in the previous month. Service sector activity growth remained modest overall, and well below the long-run trend.

Latest survey data signaled divergent trends with regard to new business, with manufacturers noting a slight contraction of new orders while new work rose modestly at service providers. That said, it was the slowest increase in new workloads in the service sector since last July. Consequently, new business at the composite level expanded at a marginal rate that was the weakest in 10 months.

Employment trends also differed between the two with service providers increasing their staffing levels while manufacturers cut their workforce numbers at the sharpest rate in seven months. However, the pace of service sector job creation was only slight having eased to a ten-month low. At the composite level, employment declined for the first time since last September, albeit at a marginal rate.

Average input prices continued to fall sharply at manufacturing companies in March, while service sector firms noted a further rise in cost burdens. However, the rate of inflation seen by service sector companies was only marginal and much slower than the series average. Meanwhile, average cost burdens at the composite level declined for the seventh month in a row. March data indicated a further marked fall in prices charged by manufacturing companies in March. In contrast, service sector firms raise their prices fractionally for the second month in a row.

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.