Chine - PMI Services

The Caixin China General Services PMI rose to a seven-month high of 53.5 in November 2019 from 51.1 in the previous month and beating market estimates of 52.7. New orders increased, as export orders accelerated to a four-month high. Meanwhile, the job creation rate dropped to a four-month low, with backlogs falling for the first time since August, albeit only slight. On the price front, input cost inflation slowed for the second consecutive month; and prices charged by service providers rose modestly, with the rate of increase little-changed from the prior three months. Looking ahead, sentiment improved, but was still notably weaker than the historical trend.

The Caixin China General Services PMI unexpectedly fell to 51.1 in October 2019 from 51.3 in the previous month and missing market expectations of 52.8. This was the weakest pace of growth in the service sector since February, as new orders rose the least in eight months and employment growth was at three-month low, with overseas sales expanding modestly. Meantime, outstanding business went up at the fastest rate since February 2017, implying a mismatch between labor supply and demand. In terms of prices, input cost inflation slowed, while output charge increased marginally. Looking ahead, confidence softened to its lowest since July last year.

The Caixin China General Services PMI fell to a seven-month low of 51.3 in September 2019 from 52.1 in the previous month and below market expectations of 52.9 as new orders and employment growth was offset by higher operating costs. New orders rose the most since January 2018, despite a softer increase in new export work, with a number of firms linking the upturn to new product releases and firmer client demand. In addition, employment growth was the quickest seen since January 2017 while backlogs of work were up for the first time since last December. On the price front, input cost inflation picked up to one-year high due to greater costs for labour, fuel and raw materials. Looking ahead, business optimism in the service sector slipped to its lowest since May.

The Caixin China General Services PMI rose to a three-month high of 52.1 in August 2019 from 51.6 in the previous month. New orders rose the most in four months, with new export business increasing solidly, and the rate of job creation was the fastest since June 2018. Meantime, the amount of outstanding work declined slightly. On the price front, operating expenses rose at the strongest pace for three months amid reports of greater purchasing prices and labor costs, while output charges went up the most in 20 months. Looking ahead, business sentiment strengthened to a five-month high.

The Caixin China General Services PMI fell unexpectedly to 51.6 in July 2019 from 52.0 in the previous month and missing market expectations of 52.0. The latest reading pointed to the weakest pace of expansion in the service sector since February, as new order growth slowed, despite a solid rebound in export sales at services companies, while employment rose marginally. On the price front, operating expenses rose further, with the rate of inflation strengthening slightly from the prior month, due to higher costs of materials, fuel and staff. Companies raised their charges slightly, with some indicating that competitive pressures had restricted pricing power. Finally, sentiment remained upbeat overall, with the degree of positive sentiment being unchanged from June.

The Caixin China General Services PMI dropped to a four-month low of 52.0 in June 2019 from 52.7 in the previous month and missing market expectations of 52.6. New work from abroad declined for the first time in nine months, with companies citing subdued global demand and tariffs. Still, overall new orders grew slightly faster, supported by fiscal policies that boosted client spending. Meanwhile, employment was broadly unchanged, as greater hiring to meet higher new business was weighed on by the non-replacement of voluntary leavers, while backlogs continued to fall. Price pressures remained historically subdued in June, as services firms saw a moderate increase in operating costs, reportedly linked to higher staff expenses and elevated purchasing activity. Looking ahead, service sector companies remained strongly optimistic.