The S&P Global PMI composite index for China rose to 51.3 in June from 49.6 in May, indicating a solid rebound in activity after the index in May had shown contraction in the aggregate Chinese economy for the first time since December 2022. The business activity index for China's services sector, also published today, moderated to 50.6 in June from 51.1 in May, while the headline index for the manufacturing PMI survey, published earlier in the week, showed expansion in the sector after previous contraction. Official PMI survey data showed modest contraction in the manufacturing sector and modest expansion in the non-manufacturing sector in June.

Respondents to today's service sector survey reported slower growth in output and new orders in June and a second consecutive decline in new export orders. The survey showed payrolls were cut for the third time in the last four months, while its measure of confidence picked up slightly, perhaps indicating optimism that global trade tensions will ease. Respondents also reported a smaller increase in input costs and a fifth consecutive reduction in selling prices.

Today's data were below with the consensus forecast of 51.0 for the survey's services index. The China RPI and the RPI-P fell from zero to minus 7 and minus 17 respectively, indicating that recent Chinese data in sum are coming in slightly below consensus forecasts.

The consensus sees Caixin services PMI basically flat at 51.0 in June from 51.1 in May. That reflects marginal continued expansion as the index remains just above the neutral 50 level, the threshold for growth versus contraction.

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.