The S&P Global PMI composite index for China fell to 51.1 in April from 51.8 in March, providing further evidence that the escalation in global trade tensions and market volatility the start of April has had an impact on conditions. The business activity index for China's services sector fell to 51.1 from 50.7, while the headline index for the manufacturing PMI survey, published last week, also indicated conditions weakened in the sector. Official PMI survey data showed deterioration in both the manufacturing and the non-manufacturing sector in April.

Respondents to today's service sector survey reported weaker growth in output and the smallest increase in new orders in more than two years April, though new export orders were reported to have risen at a slightly faster pace. The survey showed the fourth reduction in payrolls in the last five months and its measure of confidence fell to its lowest ever recorded level excluding February 2020, at the start of the Covid pandemic. Respondents also reported a marginal increase in input costs and another small reduction in selling prices.

Today's data were weaker than the consensus forecast of 51.8 for the survey's services index. The China RPI andRPI-P both fell from plus 51 to plus 23, indicating that recent Chinese data in sum are still coming in above consensus forecasts.

Forecasters see the services index pretty stable at 51.8 in April versus 51.9 in March.

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.