China Caixin PMI services rose to 53.9 in June, up from 52.9 and beat expectation of 52.7. Markit noted in the release that output expands at quicker rates at manufacturers and service provides. Staffing levels rise further at services companies, but continue to decline at goods producers. Meanwhile, there were sharper rises in input costs
Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:
“The Caixin China General Services Business Activity Index stood at 53.9 in June, rising significantly from the previous month. The employment and new business indices both climbed moderately, pointing to a positive trend in the service supply and demand sides. Input costs rose more than prices charged, putting pressure on service providers’ confidence. The index of business expectations, a gauge of companies’ confidence towards the 12-month outlook, dipped from a recent high seen in May.
“The Caixin China Composite Output Index, which covers both manufacturers and service providers, stood at 53.0 in June, rising significantly from a month earlier, suggesting a stable economy with a positive outlook. The latest surveys also showed stronger increases in input costs and output charges, which put pressure on margins. The indices for new orders and work backlogs were unchanged from the previous month’s readings. The employment index dropped into contraction territory, indicating a deteriorating employment situation. The index of expectations regarding future output also fell, suggesting less optimism across the manufacturing and service sectors. It’s doubtful that China’s economic growth will maintain stable amid tightening credit and regulations.”
