CN: General Services PMI

Wed May 03 20:45:00 CDT 2017

Actual Previous
Composite - Level 51.2 52.1
Services - Level 51.5 52.2

The Caixin China General Services Business Activity Index fell to 51.2 in April from 52.2 in March. The Caixin China Composite PMI headline index, which covers both the manufacturing and services sectors, also fell to 51.5 from 52.1. The manufacturing PMI headline index, published at the start of the month, declined to 50.3 in April from 51.2 in March.

Service sector respondents reported business activity grew in April at the slowest pace in eleven months, with new orders also recording only modest growth, albeit up slightly from the pace set in March. The manufacturing survey showed weaker growth in both output and new orders in April, with the composite measure of new orders at tis lowest level since last September. Respondents to both surveys also expressed less confidence about the twelve month outlook for activity

This drop in confidence was also reflected in the surveys' measures of employment. Service sector respondents reported the weakest increase in payrolls so far this year in April, while manufacturers reported they shed jobs at the fastest pace in three months. Cost pressures also to appear to have moderated across both sectors, with both surveys showing a smaller increase in input costs. Service sector respondents reported increasing their selling prices at a faster pace, while manufacturers reported more modest increases.

The headline index for the manufacturing survey has now fallen in three of the last four months, while the serves sector survey's headline index has dropped for each of the last four months, with both now well down on levels seen late last year. This contrasts with official data that showed year-on-year growth in GDP picked up slightly in the three months to March, but provides strong evidence that conditions in the private sector have weakened in recent months.

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.