China Caixin Services PMI dropped to 51.3 in September, down from 52.1 and missed expectation of 52.9. PMI Composite Output Index rose from 51.6 to 51.9. Slower growth in services activity was offset by stronger expansion of manufacturing output. Total new work rises at fastest pace since February 2018. Job creation in service sector leads to strongest increase in composite employment since January 2013.
Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “China’s economy showed signs of marginal recovery in September, as the labor market improved and domestic demand increased at a faster pace. However, fluctuations in exchange rates, and rising costs of labor and raw materials increased pressure on companies, which restrained business confidence. Due to previous destocking and capacity-reduction activities, constraints on companies’ production capacity became more severe and backlogs of work increased noticeably, which will help companies restore their investment. After a fast slowdown in previous quarters, China’s economic growth began to show signs of stability.”
