CN: PMI Composite

Tue Jun 02 20:45:00 CDT 2015

Actual Previous
Composite - Level 51.2 51.3
Services - Level 53.5 52.9

HSBC China Composite PMI (which covers both manufacturing and services) signaled the thirteenth successive monthly expansion of Chinese business activity in May. However, the rate of activity growth weakened for the second month in a row, with the composite index reading at 51.2, down fractionally from 51.3 in April. May data indicated that an expansion in service sector business activity was the main factor driving overall output growth, as manufacturing production contracted for the first time in five months. Furthermore, the rate of activity growth at service providers accelerated to the sharpest recorded in eight months. The services PMI reading was 53.5, up from 52.9 in April.

Business activity growth at Chinese service providers was supported by a further increase in new work in May. The latest increase in new business at service sector companies was the sharpest for three years, with panelists highlighting a general strengthening of client demand and the impact of new projects. In contrast, new business placed at manufacturers in China fell for the third successive month, albeit marginally. At the composite level, new orders increased at a moderate pace that was the strongest in three months.

In line with the trends for activity and new work, service sector employment expanded at a faster rate in May. Moreover, the latest increase in staff numbers at service providers was the fastest since January 2013. In contrast, manufacturing employment declined for the nineteenth successive month, albeit at the slowest rate since February.

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.