The S&P Global PMI composite index for China rose from 53.6 in April to 55.6 in May, indicating that China's economy expanded for the fifth consecutive month and at a faster pace, with conditions improving across major sectors. The business activity index for China's services sector, also published today, rose from 56.4 in April to 57.1 in May, while the manufacturing PMI survey, released last week, showed an increase in its headline index from 49.5 to 50.9. In contrast, official CFLP PMI survey data also released last week showed sharper contraction in the manufacturing sector and weaker growth in the non-manufacturing sector in May.

Respondents to the service sector survey reported bigger increases in output and new orders in May, with new export orders also increasing for the fifth consecutive month. Respondents, however, seem tentative about the outlook, with payrolls reported to have been increased at a slower pace and the survey's measure of confidence falling. Respondents reported solid growth in input costs and the biggest increase in selling prices in more than a year.

S&P's services PMI in May is expected to slow to 55.2 versus April's 56.4.

The S&P 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 S&P 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.