The S&P Global PMI composite index for China fell from 51.7 in August to 50.9 in September, indicating that China's economy expanded for the ninth consecutive month but at the slowest pace since January. The business activity index for China's services sector fell more sharply from 51.8 to 50.2, while the manufacturing PMI survey, also released today, showed a fall in its headline index from 51.0 to 50.6.

Official PMI survey data published earlier in the week also showed only modest growth in the Chinese economy in September, though both surveys show conditions have improved since the middle of the year. Officials have implemented some loosening of policy settings in recent months, but PMI survey data suggests these measures have yet to deliver a substantial improvement in economic activity.

Respondents to today's service sector survey reported smaller increases in output and new orders in September but an increase in new export orders after these had fallen previously. Payrolls were again reported to have been increased at a modest pace while the survey's measure of confidence fell to a ten-month low. Respondents also reported weaker growth in input costs and only a small increase in selling prices.

Today's data were below the consensus forecast of 52.0 for the service sector survey's headline index. The China RPI fell from plus 36 to plus 7 and the RPI-P fell from plus 30 to zero, indicating that recent Chinese data in sum are coming in near the consensus forecasts.

S&P's services PMI in September is expected to edge higher to 52.0 versus 51.8 in August.

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.