CN: PMI Composite

Thu Jul 02 20:45:00 CDT 2015

Actual Previous
Composite - Level 50.6 51.2
Services - Level 51.8 53.5

June composite PMI which covers both manufacturing and services pointed to a further rise in total business activity in China. However, the rate of expansion eased to a marginal pace that was the slowest recorded since May 2014. This was signaled by the composite index posting only slightly above the neutral 50.0 mark at 50.6, down from 51.2 in May. The decline in the headline index was partly caused by a further fall in manufacturing output in June (albeit marginal), but also due to a moderation in the rate of service sector activity growth. Moreover, it was the slowest expansion in services business activity since January. The services business index reading was 51.8, down from May's eight-month high of 53.5.

The slowdown in services activity growth reflected softer new business gains in June, with service providers signalling the slowest increase in new orders in 11 months. According to panelists, relatively subdued market conditions had dampened overall client demand. Meanwhile, manufacturers saw only a marginal expansion of new work, following a three-month sequence of contraction. As a result, composite new business increased only modestly over the month.

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.