The S&P Global PMI composite index for China fell to 50.3 in September from 51.2 in August, indicating that the Chinese economy is close to stagnation after stronger conditions earlier in the year. The business activity index for China's services sector fell to 50.3 from 51.6, while the headline index for the manufacturing PMI survey, also published today in a separate report, indicated renewed contraction in the sector. Official PMI survey data, meanwhile, showed further contraction in manufacturing and stagnant conditions in the non-manufacturing sector in September.

Respondents to today's service sector survey reported weaker growth in output and new orders but solid growth in new export orders in September. The survey showed a modest increase in payrolls while its measure of confidence fell to its lowest level since March 2020. Respondents also reported stronger growth in input costs but a second consecutive reduction in selling prices.

Today's data were weaker than the consensus forecast of 51.6 for the service sector survey's headline index. The China RPI and the RPI-P fell to minus 50 from minus 36 and minus 30 respectively, indicating that recent Chinese data in sum are now coming in further below consensus forecasts.

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.