The S&P Global PMI composite index for China fell to 52.8 in June from a twelve-month high of 54.1 in May, indicating that growth has moderated but remains solid. The business activity index for China's services sector, also published today, fell from 54.0 to an eight-month low of 51.2, while the previously published headline index for the manufacturing PMI survey rose slightly from 51.7 in May to 51.8 in June. Official PMI survey data published on the weekend showed further contraction in the manufacturing sector and somewhat weaker growth in the non-manufacturing sector in June.

Respondents to today's service sector survey reported weaker growth in output, new orders, and new export orders in June, after all had risen in May at the fastest pace in several months. Payrolls were reported to have been cut slightly and the survey's measure of confidence fell to its lowest level since March 2020. Respondents also reported weaker growth in input costs and a smaller increase in selling prices.

Today's data were weaker than the consensus forecast of 53.4 for the service sector survey's headline index. The China RPI and the RPI-P fell from minus 21 to minus 43 and from minus 30 to minus 42 respectively, indicating that recent Chinese data in sum are now coming in well below consensus forecasts.

S&P's services PMI is expected to slow to 53.4 in June versus May's stronger-than-expected 54.0.

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.