|Composite - Level||52.2||53.5|
|Services - Level||53.1||53.4|
The Caixin China General Services Business Activity Index fell to 53.1 in January from 53.4 in December. The Caixin China Composite PMI headline index, which covers both the manufacturing and services sectors, fell to 52.2 from a 45-month high of 53.5 in December. The manufacturing PMI headline index, published last week, fell to 51.0 in January from 51.9 in December.
Service sector respondents reported new orders grew at at a slower pace in January, broadly in line with the manufacturing survey, but together the two surveys indicated new business increased at the second fastest pace since June 2014. Both surveys also showed strong confidence about the outlook for output over the next twelve months, with the composite measure of confidence at a ten-month high. There were different indications for employment growth, however, with service sector respondents reporting the biggest increase in their payrolls since May 2015 but manufacturers reporting slightly more pronounced job shedding.
Both surveys showed higher increases in input costs in January, with respondents reporting costs rose at their fastest pace in nearly four years in the services sector but at a slightly slower pace relative to December in the manufacturing sector. Both surveys also showed firms were able to pass on costs in the form of higher selling prices but at the slowest pace since September.
The January PMI surveys together show business conditions remain solid across both sectors, though easing somewhat from December levels. Firms are now more confident about the outlook and are having some success increasing their selling prices, perhaps providing scope for job growth to pick up.
The Caixin 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 Caixin 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.
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