The S&P Global PMI composite index for China rose to 51.5 in February, picking up from a four-month low of 51.1 in January and indicating modest growth in the Chinese economy at the start of the year. The business activity index for China's services sector rose to 51.4 from 51.0, while the headline index for the manufacturing PMI survey, published earlier in the week, also indicated conditions improved modestly in the sector. Official PMI survey data showed subdued conditions in both the manufacturing and the non-manufacturing sector in January.

Respondents to today's service sector survey reported slightly stronger but still subdued growth in output, new orders, and new export orders in February. The survey showed an increase in payrolls after declines in each of the two previous months and its measure of confidence rose to its highest level since November. Respondents also reported a small fall in input costs, the first decline since mid-2020, and also small reduction in selling prices.

Today's data were stronger than the consensus forecast of 50.8 for the survey's headline index. The China RPI and the RPI-P rose from minus 14 to plus 14 and from minus 30 to plus 10 respectively, indicating that recent Chinese data in sum are now coming in just above consensus forecasts.

The index is seen pretty flat at 50.8 versus 51.0 in January.

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.