The S&P Global PMI composite index for China was unchanged at 51.2 in August, indicating modest growth in the Chinese economy after stronger conditions earlier in the year. The business activity index for China's services sector, also published today, fell to 51.6 from 52.1, while the previously published headline index for the manufacturing PMI survey rose from 49.8 in July to 50.4 in August. Official PMI survey data published last week showed further contraction in manufacturing and steady growth in the non-manufacturing sector in August.

Respondents to today's service sector survey reported weaker growth in output and new orders but stronger growth in new export orders in August. The survey showed a fall in payrolls while its measure of confidence rose slightly for the second consecutive month. Respondents also reported stronger growth in input costs but the first reduction in selling prices in seven months.

Today's data were weaker than the consensus forecast of 52.1 for the service sector survey's headline index. The China RPI and the RPI-P fell from minus 7 to minus 29 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 in August is expected to hold at July's better-than-expected 52.1 that compared with June's 51.2.

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.