The S&P Global PMI composite index for China rose to 51.9 in August from 50.8 in July, indicating conditions in the aggregate economy improved for the third consecutive month and at the fastest pace since last November. The business activity index for China's services sector, also published today, increased to 53.0 in August from 52.6 in July, while the headline index for the manufacturing PMI survey, published earlier in the week, showed modest 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 August.

Respondents to today's service sector survey reported stronger growth in output and new orders in August and a second consecutive increase in new export orders after two consecutive declines. Payrolls, however, were reported to have been cut but the survey's measure of confidence remained at a multi-month high, perhaps indicating optimism that global trade tensions will ease. Respondents also reported a marginal increase in input costs and but a fall in selling prices.

Today's data were stronger than consensus forecast of 52.5 for the survey's services index. The China RPI and the RPI-P rose from minus 43 to minus 21 and from minus 60 to minus 33 respectively, indicating that recent Chinese data in sum are still coming in well 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.