The S&P Global PMI composite index for China fell to a four-month low of 51.1 in January from 51.4 in December, indicating that the Chinese economy has lost some momentum at the start of the year. The business activity index for China's services sector fell to 51.0 from 52.2, whereas the headline index for the manufacturing PMI survey, published earlier in the week, indicated conditions stagnated in the sector. Official PMI survey data also showed weaker conditions in both the manufacturing and the non-manufacturing sector in January.

Respondents to today's service sector survey reported weaker growth in output, new orders, and new export orders in January. The survey showed the biggest fall payrolls since last April though its measure of confidence rose, with respondents citing optimism that recent policy measures will support demand. Respondents also reported faster growth in input costs and a second consecutive increase in selling prices.

Today's data were weaker than the consensus forecast of 52.5 for the service sector survey's headline index. The China RPI fell from plus 6 to minus 8 while the RPI-P fell from plus 8 to minus 8, indicating that recent Chinese data in sum are continuing to come in close to consensus forecasts.

The consensus sees services improving to 52.5 from 52.2 in December.

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.